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0,61%17.11.2011.Conclusions of the 10th International Conference
The 10th International Conference of the Belgrade Stock Exchange, held on 17th November at the Hotel Continental Belgrade, brought together representatives of numerous local and international investment firms and public media. The focus was on current economical events that intrigue the domestic and international public. More than two hundred participants discussed the topic of implementing the new Capital Markets Law, which comes into force on 17th November 2011, the eurozone crisis, the advantages of IPO and dual listing, and the importance of accurate and timely corporate information.
During the Conference, one-on-one meetings were also held between the representatives of local listed companies and interested institutional investors. Also, the award was given to the company for the best performance in investor relations category for year 2011. This was the second time this kind of award was given in Serbia.
The following conclusions were adopted at the Conference:
- The new Capital Markets Law, which was created based on previous experiences in the implementation of the former Law on Securities and MIFID Directive, has brought many changes. All changes were supposed to provide additional protection for investors, increase efficiency and transparency of capital markets and reduce system risk. Novelties introduced it The Law, that will significantly change the Serbian capital market are: the new market segmentation, the introduction of rating agencies and the investor protection fund, increased powers and responsibilities of broker-dealer companies in areas relating to the administration of funds of clients, the establishment of collateral lending, new procedures in the area of reporting and information disclosure.
For a clearer picture it is necessary to wait for the adoption of the relevant bylaws, which should clearly and unambiguously establish a framework for the implementation of the new Law and to pull the market focus toward the development of its basic function - to raise capital.
- Macroeconomic stability has become a challenge for most developed economies of the Eurozone, and the degree of vulnerability of South Eastern Europe region significantly increased the potential spillover of the crisis, with far reaching consequences. It was noted at the Conference that the government policy regarding public finances, especially public debt level must be responsible and accurate. It was stressed that high levels of unsustainable external debt of EU countries can lead to the outbreak of the currency and banking crises in the region. Additional problem could be found in validity of the data used for calculation of debt and GDP ratios, which could lead to inappropriate conclusions.
- One of the key shortcomings of the existing Law governing the capital market is the inability to effectively implement the IPO procedures. Adequate (de)regulation of this process is an act that domestic private companies are eagerly awaiting, whether the listing plan they have is for domestic market or a dual listing.
Highlighted benefits of dual listing are:
- positive effects on the rating of the owners and investors
- increased confidence in the company and its business (especially for small shareholders)
- access to international capital markets
- increased number of potential customers
- increased participation of investors willing to fund development in the medium term
- increased certainty for the raising of additional capital for growth and development, through the issuance on the market.
Special attention was given to the importance of supervision and regulation of markets and the rules adopted by IOSCO - International Organization of Securities Commissions.
- The efficiency of market mechanisms and the determination of fair market values are primarily determined by the availability of accurate, comprehensive and timely information. Numerous corporate scandals and the financial crisis changed the behavior of the investors and listed companies, leading to microstructural market changes that involve more and more information necessary for adequate decision making. Some indicators that were important for the particular type of investment (socially responsible investing), now have the status that is almost identical to the standard financial models. This process, which leads to the creation of a new paradigm of responsible investment, is a slow but takes place continuously in the direction of redefining the fundamental principles of sustainable capital markets.
- Considering investor relations, Serbian companies recorded good results in comparison with the situation in the region. Still, in order to step into the international markets, companies should pay more attention to improving business relationships with the investors, especially the process of voluntary reporting and communicating in English language.
During the Conference, one-on-one meetings were also held between the representatives of local listed companies and interested institutional investors. Also, the award was given to the company for the best performance in investor relations category for year 2011. This was the second time this kind of award was given in Serbia.
The following conclusions were adopted at the Conference:
- The new Capital Markets Law, which was created based on previous experiences in the implementation of the former Law on Securities and MIFID Directive, has brought many changes. All changes were supposed to provide additional protection for investors, increase efficiency and transparency of capital markets and reduce system risk. Novelties introduced it The Law, that will significantly change the Serbian capital market are: the new market segmentation, the introduction of rating agencies and the investor protection fund, increased powers and responsibilities of broker-dealer companies in areas relating to the administration of funds of clients, the establishment of collateral lending, new procedures in the area of reporting and information disclosure.
For a clearer picture it is necessary to wait for the adoption of the relevant bylaws, which should clearly and unambiguously establish a framework for the implementation of the new Law and to pull the market focus toward the development of its basic function - to raise capital.
- Macroeconomic stability has become a challenge for most developed economies of the Eurozone, and the degree of vulnerability of South Eastern Europe region significantly increased the potential spillover of the crisis, with far reaching consequences. It was noted at the Conference that the government policy regarding public finances, especially public debt level must be responsible and accurate. It was stressed that high levels of unsustainable external debt of EU countries can lead to the outbreak of the currency and banking crises in the region. Additional problem could be found in validity of the data used for calculation of debt and GDP ratios, which could lead to inappropriate conclusions.
- One of the key shortcomings of the existing Law governing the capital market is the inability to effectively implement the IPO procedures. Adequate (de)regulation of this process is an act that domestic private companies are eagerly awaiting, whether the listing plan they have is for domestic market or a dual listing.
Highlighted benefits of dual listing are:
- positive effects on the rating of the owners and investors
- increased confidence in the company and its business (especially for small shareholders)
- access to international capital markets
- increased number of potential customers
- increased participation of investors willing to fund development in the medium term
- increased certainty for the raising of additional capital for growth and development, through the issuance on the market.
Special attention was given to the importance of supervision and regulation of markets and the rules adopted by IOSCO - International Organization of Securities Commissions.
- The efficiency of market mechanisms and the determination of fair market values are primarily determined by the availability of accurate, comprehensive and timely information. Numerous corporate scandals and the financial crisis changed the behavior of the investors and listed companies, leading to microstructural market changes that involve more and more information necessary for adequate decision making. Some indicators that were important for the particular type of investment (socially responsible investing), now have the status that is almost identical to the standard financial models. This process, which leads to the creation of a new paradigm of responsible investment, is a slow but takes place continuously in the direction of redefining the fundamental principles of sustainable capital markets.
- Considering investor relations, Serbian companies recorded good results in comparison with the situation in the region. Still, in order to step into the international markets, companies should pay more attention to improving business relationships with the investors, especially the process of voluntary reporting and communicating in English language.
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