Annual Report 2009
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2009 Belgrade Stock Exchange j.s.c ANNUAL REPORT 2009 Annual Report 2009 INTRODUCTION As in the previous years, the BSE business operation in 2009 was conditioned by the existing business environment within the current economic and political situation in Serbia. This Annual report should also be viewed in light of the global financial crisis. Under the said circumstances, the BSE strove to realize the tasks projected in the regulatory and technical and technological domains in an attempt to remain a reputable regional institution. The activities were focused on modernisation and establishment of up-to-date, standard and safe working conditions and improvements in the areas of investor protection, corporate governance, transparency in price formation and disclosure. These activities constituted the basis of the BSE’s projected and realized plans. Thus, the BELEXFIX was successfully completed, function of market makers was improved, BSE procedures and rules were modified accordingly, BSE and companies listed at its market were successfuly promoted and the final financial results were good. The year of 2009 was marked by a dynamic international activity of the Republic of Serbia, mostly focused on fulfilling conditions for accessing the EU and on the diplomatic activity with respect to the status of the Serbian southern province. The most significant political events on the domestic and international scene in 2009 are the following: - The global financial crisis and economic recession continued, causing a further drop in GDP, an increase in the budget deficit, a rise in unemployment rate, serious and expensive debts, a fall in investment activities and estimations that the crisis and its consequences will continue in the period to come; - The famous world companies experienced difficulties in their business operations, there was a further fall in economic activities in a number of sectors, caused by a general consumption decline, and states intervened in the private sector; - Sale of 51% of NIS capital to the Russian company Gasprom by a direct deal and further postponement of privatization of public companies through IPO; - Introduction of visa free regime for Serbian citizens, Serbian candidacy for EU and full implementation of the Stabilization and Association Agreement between EU and Serbia; - Distribution of 15 % of NIS shares to Serbian citizens free of charge, before change of organization of this company into a public company; - Significant changes in the domestic currency exhange rate in the last quarter of 2009. Belgrade Stock Exchange j.s.c Belgrade 1 Annual Report 2009 Macroeconomic data: The world economic crisis, which started in the fourth Middle exchange rateofRSDin 2009 guarter of 2008, was in full swing in Serbia during the 97,0 previous twelve months. 96,0 95,0 After a GDP growth rate of just 94,0 above 5% in 2008, all business 93,0 segments recorded a significant 92,0 fall in 2009. The GDP fall 91,0 estimates range between 90,0 3,5% and 4%. 89,0 The industrial production in the Source:NBS first quarter of the previous year went down by 18% relative to the same period in Foreign currency reserves 2008, with foreign trade 12,00 recording a substantial fall of 10,03 9,64 almost 40% in the same 10,00 9,03 8,16 period. Imports also dropped 8,00 due to a decline in domestic demand, which led to a 6,00 4,94 decrease in the trading deficit 4,00 in the absolute amount. 2,84 3,12 2,19 2,00 1,33 The recession eased the 0,00 inflatory pressures during the 2001 2002 2003 2004 2005 2006 2007 2008 2009 year, reducing inflation to the devizne rezerve (mlrd €) projected level: however the Source:MFIN prices controlled by the state are by 50% higher than those Direct foreign investments formed freely on the market. 4000,0 3492,2 3500,0 The total employment rate 3000,0 dropped by about 100.000, Milioni EUR 2500,0 pushing down the 2000,0 1820,8 1812,1 unemployment rate by further 2% - from 14.4% to 16.4%. 1500,0 1205,7 1244,6 1073,2 1000,0 776,6 502,0 500,0 184,3 0,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 FDI Source:MFIN Belgrade Stock Exchange j.s.c Belgrade 2 Annual Report 2009 GDP Exports were lower by 25% (in 40.000 34.259 EUR) in the first three quarters 35.000 31.511 29.543 of 2009, while imports 30.000 Milioni EUR continued to fall, by even 31% 25.000 23.521 compared to the same period 20.358 19.075 20.000 17.416 of 2008. 16.034 15.000 12.820 10.000 The risks were somewhat 5.000 alleviated by large participation 0 of liquid means of the banking 2001 2002 2003 2004 2005 2006 2007 2008 2009 sector (24.8% in September BDP u milionima EUR izvor:MFIN 2009) and high level of capital (capital adequacy ratio was in September 21.3%). Foreign currency savings Retail foreign exchange 7.000 deposits also recovered and by 5.982 mid-November returned to the 6.000 5.029 4.881 level before the crisis. Milioni EUR 5.000 4.000 3.414 A large amount of loans linked 3.000 2.275 to the foreign currency in 2.000 1.465 Serbian banks’ portfolios raise 1.100 813 concerns (about 75% of all 1.000 330 loans), while non-performing 0 loans rose from 4.7% at year 2001 2002 2003 2004 2005 2006 2007 2008 2009 beginning to 7.6% of the total Štednja stanovništva ‐mil. EUR amount of loans granted by end September. Source:MFIN Belgrade Stock Exchange j.s.c Belgrade 3 Annual Report 2009 REGIONAL POSITION BSE regional position Market capitalization In the Balkan economic 50 environment, 2009 was marked EUR 45 40 by indices fluctuation and their Mlrd 35 increase at the annual level. 30 25 20 SEE indices, in spite of high 15 growth rates compared to the 10 levels in 2008, remained bellow 5 the levels recorded in the 0 previous years. In spite of price BELGRADE Bucharest Ljubljana Sofia Zagreb rises and good index 2005 2006 2007 2008 2009 performances, the regional stock exchanges recorded a Share turnover by years sharp fall in share turnover. 6 EUR 5 Mlrd 4 3 2 1 0 Belgrade Bucharest Ljubljana Sofia Zagreb 2005 2006 2007 2008 2009 SEE indices 1.800,00 1.600,00 1.400,00 1.200,00 1.000,00 800,00 600,00 SBI20 CROBEX SOFIX MBI BIRS BELEX15 DJ SUBB30 Belgrade Stock Exchange j.s.c Belgrade 4 Annual Report 2009 1. Business operation 1.1. Turnover: Totalturnoverbymonths The total turnover at the BSE in 2009 amounted to RSD 41.8b, 25 2006 i.e., about EUR 442 million, down 2007 by 41.9% compared to 2008. As 20 2008 in the previous years, the traded 2009 15 material included company shares and RS bonds, and was 10 dominated by share trades. 5 A fall in liquidity in trading can be seen from the total number of 0 realized transactions amounting to 77,215, a fall of over 35% or almost 42 thousand tansactions less then in 2008. Total number of transactions by months A decline in foreign and domestic 45 2006 demand, which started in the 40 2007 second half of 2008, reached its 35 2008 maximum in 2009. 2009 30 25 The lowest total monthly 20 turnover, amounting to RSD 15 1.17b, was recorded in July, 10 while the total number of 5 transactions was the lowest in 0 January (3,454). The total monthly turnover reached its peak in December, amounting to RSD 18.7b. Average daily value of turnover In 2009, the average daily turnover amounted to just above RSD 167 million, down by 42% 700 as against 2008, with an average RSD 600 daily transaction value of RSD 541,067. 500 Miliona 400 300 200 100 0 2004 2005 2006 2007 2008 2009 prosecna dnevna vrednost prometa Belgrade Stock Exchange j.s.c Belgrade 5 Annual Report 2009 Turnover structure by markets The total turnover structure in 2009 indicates a somewhat higher risk aversion and investors looking for safer Vanberzansko tržište investments. 81,1% After a two-year downward trend, 2009 saw a higher participation of RS bonds in Prime market total trading. RS bonds 17,8% accounted in total trading for 12.17%, up by 4.7% compared Standard to the previous year. market 1,1% Consequently, participation of share trades in total turnover decreased as against the previous year accounting for 87.83%. Turnover structure over the last 5 years The biggest part of turnover, even 81%, was realized at the unregulated market, while the regulated market accounted for 2006 18.9% of the trading value, 23,5% 2007 with 17.8% at the Prime 38,6% Market and 1.1% at the 2005 Standard Market. 11,3% 2009 2008 9,8% 16,8% Belgrade Stock Exchange j.s.c Belgrade 6 Annual Report 2009 1.2. Share turnover: Share trades accounted for 87.83%, down by 4.7% compared to the previous year. Total share turnover by months Mlrd Share turnover in 2009 25 2006 amounted to RSD 36.7b, i.e. EUR 2007 20 2008 387.9 million, a decrease of 2009 44,83% compared to 2008. 15 Share transactions accounted for 88.72% of the total turnover, a 10 fall of 4.38% as against the previous year. The number of 5 share transactions amounted to 0 68,503. The average daily share turnover in 2009 reached RSD 144.5 Turnover structure by types of securities million, i.e.