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BELGRADE STOCK EXCHANGE - Market Overview with 2019 Outlook

Belgrade Stock Exchange in 2018

 Turnover falls, chronic illiquidity trend set

 The domestic stock market recorded a slight increase of 0.3% in 2018, measured by the Belex15 index, contributed by the Belgrade Airport (AERO), which became the subject of the concession and Komercijalna Bank (KMBN), in anticipation of privatization in 2019. The aforementioned companies, with Galenika Fitofarmacija (FITO) and the Petroleum Industry of Serbia (NIIS), have taken over 60% of equity turnover on the Belgrade Stock Exchange, where the trend of consolidation of the ownership structure in a number of companies has continued. The value of the free float of the index basket increased during the year to EUR 403m, but as a result of the growth in the value of Belgrade Airport and Komercijalna Bank. Substantially, maneuvering space for stock trading has become even narrower, although during the year the first IPO was conducted (Fintel Energy).

The turnover of shares in relation to 2017 dropped 2.7% and amounted to EUR 66.1m (average daily turnover of EUR 0.26m), which, after 2016, was the weakest trading year on the Belgrade Stock Exchange. The beginning of Belgrade Airport concession and the expected drop in its market capitalization, the possible privatization of Komercijalna Bank and the continuation of the ownership consolidation in other companies do not provide optimism for the recovery during the current year.