Tirana, January, Ivan Shteriev CEO Macedonian Stock Exchange

Transcription

1 CAPITAL MARKET DEVELOPMENT IN THE REPUBLIC OF MACEDONIA AND SEE REGION Tirana, January, 2018 Ivan Shteriev CEO Macedonian Stock Exchange

2 MACEDONIAN CAPITAL MARKET LEGAL AND INSTITUTIONAL FRAMEWORK 1. LEGISLATION FRAMEWORK (Law on securities, Law on takeovers, Law on investment funds, SEC s secondary regulation, MSE s rules, CSD s rules ) 2. MARKET PARTICIPANTS 1. In 2017 on the Macedonian capital market 11 authorized securities market participants operated. In January 2017, 1 new bank (Sparkasse Bank Macedonia Skopje) started its s operations for trading in securities on Macedonian Stock Exchange ( first new member firm after 9 years). 2. Historically maximum number of authorized securities market participants was 27. Minimum number of authorized securities market participants was PRIMARY SECURITIES MARKET 1. The total amount of the issuance of securities (shares) in 2016 was around mill. EUR. In the period January-September 2017, the total amount of issued shares was 3 mill.eur. In this period 1 corporate bond was issued in total amount of 1 mill.eur. The approved issues were realized as private placements. The total amount of the issuance of securities (shares) in the period was around 127,85 mill. EUR. The approved issues were realized as 26 private placements and 1 public offering. 4. MACEDONIAN STOCK EXCHANGE 1. Private JSC company (35 shareholders) founded in 1995; started operation in 1996; members (out of which 5 are brokerage houses and 6 authorized banks with special departments that are dealing in securities) listed companies 4. BEST trading system (former LJSE trading application) 5. Other key systems as SEINet, B/O, SEE link 6. Settlement T+3 (transfer to T+2 excepted in 2018) 5. FUND INDUSTRY 1. In November 2017, the number of investment fund management companies was 5 and they managed 15 open-end investment funds. The net asset value of the open-end investment funds on was around 94,09 mill. EUR.( 59,96% compared to 2016) 2. Pension funds - Total net asset value of both pension funds on was 917,38 mil. Eur. 3,13% investments in shares and 49,68% in bonds, 6,20% investments in foreign shares, 21,91% investments in foreign investments funds.

3 Listed companies 107 listed companies or approximately 20 % of all JSC in RM MACEDONIAN STOCK EXCHANGE RECENT KEY FIGURES Net profit of listed companies ( ) 140 mil. EUR ( ) 147 mil. EUR Total P/E 15,30 Total P/B 1,01 Net profit of MBI10 companies ( ) 99,7 mil. EUR ( ) 96,2 mil. EUR MBI10 P/E 10,12 MBI10 P/B 1,17 Turnover/mar.cap/index 2017 Total turnover Turnover listed 77 mil. EUR Disclosure statistic ( ) 43 mil. EUR 600 information related with Market cap. of listed companies 2.161,83 mil General Assembly and Decisions EUR 524 other price sensitive information Market cap. % of GDP 22,04% 116 audited financial statements Turnover /mar.cap 1,77% 514 periodical financial statements MBI10 index ( value ) 2.538,86 YTY % 18.92% Members 11 Member firms Top traded 2017 Komercijalna banka Skopje Alkaloid Skopje NLB Banka Skopje Stopanska banka Skopje Makpetrol Skopje 63 % in BEST turnover Top 10 traded companies 81 % in BEST turnover 56 % in total turnover Foreign participation BUY SELL ,84% 29,17% ,06% 24,15% ,71% 28,27% ,56% 30,22% ,60% 14,68%

4 Top traded companies in 2017 TOP TRADED COMPANIES & BONDS Issuer Business Turnover BEST EUR P/E Market capitalization EUR FF % P/B Dividend yield Index member Komercijalna banka Skopje Finance , ,7 4,77% MBI10 Alkaloid Skopje Pharmacy , ,88 1,3 3,27% MBI10 NLB Banka Skopje Finance , ,03 1,4 7,54% MBI10 Stopanska banka Skopje Finance , ,36 1,2 30,28% MBI10 Makpetrol Skopje Energy , ,13 0,9 3,36% MBI10 Granit Skopje Construction , ,37 0,5 3,41% MBI10 Makedonijaturist Skopje Service , ,55 0,8 4,43% MBI10 Ohridska banka Skopje Finance , ,98 0,7 1,98% MBI10 TTK Banka Skopje Finance , ,48 0,8 8,71% / UNI Banka Skopje Finance , ,1 0,7 0,00% / Total Government bonds Traded bonds in 2017 Turnover EUR Yield to maturity* Index member Denationalization VII issue (RMDEN07) Denationalization VIII issue (RMDEN08) ,36% OMB Denationalization IX issue (RMDEN09) ,79% OMB Denationalization X issue (RMDEN10) ,37% OMB Denationalization XI issue (RMDEN11) ,53% OMB Denationalization XII issue (RMDEN12) ,48% OMB Denationalization XIII issue (RMDEN13) ,27% OMB Denationalization XIV issue (RMDEN14) ,44% OMB Denationalization XV issue (RMDEN15) ,23% OMB Total *annual average yield to maturity of bonds with maturity over 1 year

5 MACEDONIAN STOCK EXCHANGE PAST PERFORMANCE In EUR TRADING IN BEST BLOCK TRANSACTIONS PUBLIC AUCTIONS PUBLIC OFFERINGS TOTAL TURNOVER NUMBER OF TRANSACTIONS Market capitalization (Official market) Mar.cap/GDP% 16,48% 33,42% 9,22% 9,46% 7,37% 6,61% 7,20% 19,54% 20,38% 19,89% 18,70% 22,04% МBI , , , , , , , , ,20 % of annual MBI10 index change 1.833, , ,86 61,54 109,07-72,92 31,28-17,19-13,34-12,34 0,44 6,06-0,59 16,45 18,92 Number of listed companies Number of trading days Members TIMELINE

6 CHARACTERISTICS OF THE DOMESTIC CAPITAL MARKET Unstable dynamic of the turnover,volumes and liquidity of the main financial instruments Price hibernation (new trend in 2016 & 2017) Significant participation of the domestic individual investors Absence of big investors, with exception of sporadic activities of domestic funds Low attractiveness of the market for foreign portfolio investors Limited and decreasing number of securities and lack of new financial instruments Strong influence of physiological factors and negative collective memory from the crises period Developments in some listed companies (with regards to investors relations, treatment of the minority shareholders, on-going business operation, market share etc) Decreasing trend in the number of member firms and individual brokers Relatively passive policies and undeveloped sales practice of the financial intermediaries Significant bank-concertation of the economy Low interest rates Favorable tax environment Unpredictable non-economic environment Insufficient level of financial education Lack of continuous systematic support of market development (until now)

7 CHALENGES AND OPPORTUNITIES CHALENGES OPPORTUNITIES New reality Council for capital market development Seeking of positive factors combination Still historically low interests rates EU/NATO accession (possible breakthrough in 2018) Market supply (IPO, securitization, etc.) Mentality and generation change New securities legislation (full compliance with EU regulation) SEE Link (order-routing system - now supports trading on seven markets) B/O SW + E Trader Trading concentration rule (until EU accession) Confidence Mandatory listing (until April 2018) 7

8 QUANTITIVE OVERVIEW OF SELECTED REGIONAL MARKETS TOTAL TURNOVER IN EUR /2016 Skopje ,78 Sofia (regulated) ,55 Belgrade ,72 Ljubljana ,13 Montenegro ,80 Banja Luka ,12 Zagreb ,30 TOTAL TURNOVER OF SHARES IN EUR /2016 Skopje ,19 Sofia ,88 Belgrade ,51 Banja Luka ,03 Ljubljana ,39 Zagreb ,95 Montenegro ,17 TOTAL MBI10 % SOFIX % SBITOP % BELEX15 % CROBEX % MONEX % BIRS % ,26-0,59 460,90-11,72 696,15-11,22 644,10-3, ,63-3, ,07 6,80 658,99-8, ,91 16,45 586,43 27,24 717,59 3,08 717,37 11, ,84 18, ,59-5,09 546,67-17, ,86 18,92 677,45 15,52 806,52 12,39 759,80 5, ,87-7, ,43-11,60 543,38-0,60 Source: Internal MSE analysis 8

9 COMMON REGIONAL DENOMINATOR (I) - UNDERDEVELOPED CAPITAL MARKETS - 9

10 COMMON REGIONAL DENOMINATOR (II) - FREQUENTLY STATED CONCLUSIONS - Stock exchanges in SEE are too small to function efficiently as independent institutions in the long term they have to cooperate and find ways how to integrate their markets Big foreign institutional investors consider the whole SEE region as one marketplace thus the linkage of different and separate national markets is essential and inevitable in one way or another 10

11 EXCHANGES LINKAGES Stock exchanges linkages are generally reaction on the need for: Neutralizing the competition Creating new value increasing the turnover Decreasing the operating costs Attracting new investors in the local financial instruments Combination Differences among the developed exchanges and SEE exchanges with respect of the integration: Developed exchanges: fierce competition (both on the demand and supply side) cost reduction and synergies are leading factors; SEE exchanges: fragmented, small and illiquid markets with low turnovers main driver for integration is uncertain future growth; 11

12 LINKAGES POSSIBILITIES Different models for stock markets linkages, broadly: INTEGRATIONIST: NYSE Euronext, NASDAQ OMX Nordic, CEESEG ACQUISITIVE: CME, ICE Futures COLLABORATIVE: ASEAN, MILA, SEE LINK One common goal for linking capital markets: facilitate connectivity in all relations and directions in order to increase market attractiveness 12

13 SEE LINK March SEE Link becomes operational. Order routing system connecting Bulgarian, Croatian and Macedonian SE member firms. SEE Link acts as order-routing facility using the regional exchanges as access points Now supports trading on seven markets (LJSE, ZSE, BLJSE, SASE, BELEX, MSE and BulSE) SEE Link indexes - Blue chip equity indices, SEE LinX and SEE LinX EWI, aim to enhance visibility of regional markets Still developing, huge potential 13

14 THANK YOU! 14