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NewsMontenegro Stock Exchange plans to introduce a new Corporate Governance Code

Montenegro Stock Exchange plans to introduce a new Corporate Governance Code

Shares of the Post of Montenegro, the Airport and the Investment and Development Fund (IRF) should, according to the preliminary analyzes of the Montenegro Stock Exchange, and based on its new rules, be included in the regulated market in the near future, that is, they should join successful companies.

The executive director of the Montenegro Stock Exchange, Milena Vučinić, said that it will be a challenge for those companies to go through all the prescribed procedures for listing on the regulated market.
– The mentioned state companies are listed on the stock exchange, but on the lowest market segment, that is, the market intended for companies that are doing poorly, or that are bankrupt, said Vučinić in an interview with the Mina-business agency.
She added that the Montenegro Stock Exchange also plans to introduce a new Corporate Governance Code.

– The new Code will aim to harmonize the standards expected of listed companies with the standards in other European countries that have similar capital markets, while respecting the specificities of the economy in Montenegro, said Vučinić.

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She explained that companies with a good management standard and transparency attract capital more easily, due to greater investor confidence.

The benefit of the Corporate Governance Code, as he claims, is not only for individual companies, but for the market and the economy of the country as a whole.

– The adoption of the standards from the Code by our companies should show investors that they can confidently invest in the Montenegrin capital market, said Vučinić.

Commenting on last year as a whole, Vučinić announced that turnover in the amount of EUR 78.18 million was realized on the Montenegro Stock Exchange, which represents a growth of 65 percent compared to 2021.

2.49 thousand transactions were realized, i.e. 53 percent more than in 2021.

– Stock market indices recorded significant growth. The MNSE10 index, which tracks the movement of the most representative companies, grew by 31.98 percent, while the index that tracks the movement of the overall market recorded a growth of 43.31 percent, which means that share prices rose dominantly, explained Vučinić.
The market capitalization at the end of last year amounted to over 3.5 billion euros and was 11.67 percent higher than at the beginning of the year.

– Last year brought breakdowns in the stock and bond markets around the world, which have not been seen for a long time. Generally speaking, our capital market can be satisfied, given that the turnover, market capitalization and indices recorded growth, Vučinić believes.

For the sake of comparison, as she stated, the most important stock market indices in the world fell sharply during the last year. The STOXX 600 index of leading European shares lost 12.9 percent, the German DAX 12.5 percent, the French CAC 9.5 percent, and the American S&P 500 more than 19 percent.

When asked what were the most significant transactions that marked the past year on the Montenegro Stock Exchange, Vučinić replied that the largest turnover was achieved by trading shares of Elektroprivreda (EPCG) in the amount of 15.2 million euros, followed by Budvanska Riviera 14.7 million, Luke Bar 12, 1 million, Sveti Stefan hotel 9.7 million, Hipotekarne banka 4.5 million, Lovćen banka 4 million, Jugopetrol 1.4 million and Crnogorski Telekom 1.2 million euros.
– Three block deals were concluded with the shares of NLB Bank for 12.3 million euros, then the company Mješivoto Herceg Novi in the amount of 635.73 thousand euros and the Montenegrin Electric Transmission System (CGES) in the amount of 550.05 thousand euros, specified Vučinić .

When it comes to participation in the number of transactions, the record holder is the shares of Luka Bar, with 1.47 thousand transactions, which represents a share of almost 60 percent in the total number of transactions realized last year.

Vučinić announced that the companies included in the MNSE10 index at the end of the third quarter of last year achieved an average growth in business income of 56 percent.

Port of Bar and Jugopetrol had the biggest increase in the mentioned category.

When it comes to the net result at the end of the third quarter last year, the biggest growth was achieved by Port of Bar, Budvanska riviera, Hipotekarna banka and CGES.

– Judging by the business indicators for the first three quarters of last year, it is easy to conclude and it is to be expected that the business results of the top ten companies from the MNSE10 index at the end of last year will surpass the business results achieved at the end of 2021, said Vučinić.

She announced that the Montenegro Stock Exchange, professionally and in accordance with the rules, enabled the state to achieve its economic and economic achievements last year, that is, to bring together buyers and sellers of financial instruments, which is the ultimate role of the stock exchange.

– All transactions were successfully implemented – EPCG share auction, CGES transaction block and purchase of Port of Bar shares from small shareholders. By listing on the stock exchange, state companies commit themselves to a transparent flow of information and regular reporting, which has been achieved, explained Vučinić.
She said that connoisseurs of international financial markets know very well that the strength and development of every national stock exchange depends and rests on the state that creates the economic, legal and political environment, then on strong issuers, the spectrum and volume of financial instruments that are traded, investors and the competencies of all participants .

When asked what the interest of natural persons in trading on the stock exchange was last year, Vučinić answered that, after many years of passivity and withdrawal, small shareholders returned to the stock exchange, mainly as sellers of Port of Bar shares.

– There was an opportunity to make a profit. The state, through decisions to increase its ownership share in strategic companies, was the main locomotive that started and characterized trading on the Montenegrin capital market last year, said Vučinić.

According to her, there are very few new, especially young investors. It is about the generation of investors up to 35 years of age, which, as he claims, was not created in Montenegro.

– Young people are poorly informed or uninterested, while rare individuals prefer investing in foreign stock markets and cryptocurrencies. The middle and older generation of Montenegrin citizens are present on the stock market and they are oriented towards trading shares of successful Montenegrin companies, or are interested in selling the shares they own, added Vučinić.

She believes that work on increasing financial literacy should be the task of all those who work in the financial sector, because it is the only way and path for citizens to be educated and involved in the capital market.

When it comes to last year’s sale of state and corporate bonds on the Montenegro Stock Exchange, Vučinić announced that most investors held state bonds until maturity, so their participation in the sweep was symbolic, that is, it amounted to around 22 thousand euros.

– Regarding corporate bonds, the turnover was 1.1 million euros, Vučinić specified.

Commenting on the cooperation with the Istanbul Stock Exchange, as a shareholder of the Montenegro Stock Exchange, Vučinić said that the Istanbul Stock Exchange is the owner of the Montenegro Stock Exchange, which has qualified participation, which means that, together with part of the shareholders from Montenegro, it has the majority of voting rights, that is, the right to manage and have decisive influence and control.

– Cooperation between the two stock exchanges takes place on a daily basis. Of course, there is room for further expansion of cooperation and work is being done on it, concluded Vučinić.

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