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Business News Growth Trends in the Transport Sector During 2010, the total turnover in Montenegrin ports grew by 18.7%. Export trade increased by 36.1% while imports decreased by 3.7%. More than 42% of all cargo was transported by rail in Montenegro, but there were also 11.4% fewer passengers in comparison with 2009. At the same time, an increase of 26% was recorded in passenger transport and an increase of 46.1% in the transport of cargo. More than 12.3% of passengers and more than 6.7% of cargo were transported by road. The postal system, however, recorded a slight fall of 3.7% in volume (packages and letters).
EUR 875,000 Approved for 11 Projects
Biggest Exports to Italy, Biggest Imports from Serbia
The Board of Directors for the Investment-Development Fund of Montenegro reached a decision regarding the financing of 11 projects aimed at small and medium-sized companies. Total funding of €875,000 was agreed. Ten out of three leven projects will be implemented through a direct loan arrangement with the Investment-Development Fund, and one will operate with warranties and with the assistance of certain commercial banks. Regarding the sector structure for approved loans, projects in the fields of tourism and catering, production, agriculture and food production dominate and account for more than 90% of the total number of approved projects.
Montenegro’s total trade volume with the rest of the world, during the first two months of 2011, reached €272 million, which was an increase of 27.7% in comparison with the same period last year. The main foreign trade export partners were Italy with €15.6 million, Serbia with €14.7 million and Hungary with €8.6 million. The main foreign trade import partners were Serbia with €55.5 million, Bosnia and Herzegovina with €16.7 million and Greece with €15.3 million. The highest level of foreign trade was achieved with the signatories of the CEFTA Agreement and with the European Union.
The International Conference on trade and investment held in Dubrovnik
Montenegro’s Credit Rating Improved
The two-day international conference, The Brown Forum, on the improvement of investment in Southeast Europe started in Dubrovnik on 6th April 2011 with the participation of officials and businessmen from the region and the United States, Austria, Hungary and Italy. At the economic conference, more than 200 representatives of state institutions, American companies and companies in the region discussed the improvement of investment in the Southeast Europe and the creation of regional business partnerships and American companies. Among the best known U.S. companies whose representatives participated were the following: Bechtel (Bechtel), Coca-Cola (Coca-Cola), General Electric (GE), Hewlett-Packard (HewlettPackard) Ai-Bi-EM (IBM), Microsoft (Microsoft) and others. Montenegrin minister of economy with colleagues from Croatia, Slovenia, Serbia and Macedonia participated in the panel on overcoming barriers to regional trade and investment. Montenegro was recognized as one of the most investment destinations in the region, given the continuous inflow of direct foreign investment despite the global economic situation.
Moody’s Investors Service has changed the outlook on Montenegro’s Ba3 Government bond ratings to stable from negative and has affirmed the rating at its current level. The outlooks on the Baa1 foreign currency bond ceiling and the B1 foreign currency deposit ceiling were also changed to stable from negative. Moody’s decision to move the outlook to stable from negative was prompted by the rating agency’s assessment that the Montenegrin government is addressing the key risks that triggered the negative outlook in April 2009. In particular, Moody’s noted improvements in the following areas: (1) The Government has started to reverse the significant fiscal deterioration it experienced in 2008/09, as reflected by a lowerthan-planned 2010 budget deficit. (2) The economy is showing signs of a gradual recovery. In 2010, real GDP growth was positive compared with earlier expectations of a second year of recession after the steep decline in 2009. (3) The situation of the banking sector is stabilizing. Liquidity in the banking sector has improved, with retail deposits in particular flowing back into the system.
Mr. Jose Manuelo Barroso and Delegation of EU visited University Donja Gorica (UDG) The President of the European Commission, Jose Manuel Barroso and the European Commissioner for Enlargement, Stefan Fule, together with a ten-member delegation visited University of Donja Gorica on 8th April, 2011. This visit is a huge incentive to development, and even greater recognition. They said that Montenegro is on a good way, but it has to give the European Union concrete results in the field of the rule of the law and independence of justice, as well as in the fight against organized crime and corruption. It was also pointed out that Montenegro made progress in fulfilling the recommendations of the European Commission for receiving the date of the negotiations. In addition, Mr. Barroso met with the Mr. Filip Vujanović, President of Montenegro; Mr. Igor Lukšić, Prime Minister and with Mr. Ranko Krivokapić, President of the Montenegrin Parliament.
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April 2011
EUR 37 million for the Renovation of Sveti Stefan
The Sarajevo Business Forum 2011
An agreement regarding support for the renovation project for the Sveti Stefan Hotel and for the construction of the Kraljičina Plaza Hotel was signed by the Minister of Sustainable Development and Tourism and by representatives of the Budvanska Rivijera, including companies from the Miločer Hotel Group, Adriatic Properties, Aidway Investments Limited, General Hotel Menagament Limited, Aman resorts Management B.V. and the European Bank for Reconstruction and Development.This financial arrangement implies that €37 million will definitely be available for the realization of work on these hotels.
The Second International Investment Conference titled „Sarajevo Business Forum 2011“ was held in Sarajevo from 6th to 8th April. It promoted 153 projects worth €14.7 billion. Most projects came from tourism sector, total of 46, and their value amounts to €528 million. Infrastructure sector promoted 31 projects worth €8.98 billion, 30 projects from energy sector worth €4.83 billion and 26 agriculture projects worth €339 million. Nine projects worth €18.56 million represented wood industry, financial segment had eight projects worth €33 million and three projects came from education sector worth €10.18 million.
Great Interest in Apartments in Luxurious Marina
Montenegro and Belgrade on top of list of tourist destinations
The interest of buyers in housing units at the luxurious marina, Porto Montenegro in Tivat, has exceeded all expectations. The complex is being built at a former military shipyard by the Canadian billionaire Peter Munk. The construction of the fourth facility has now started, and preparations to start with the fifth areal ready in progress. The prices of around a hundred apartments range from €180.000 to €1.8 million. Most of the buyers are from Great Britain, Russia, Austria, Germany and Switzerland. Canadian businessman, stated that elite tourism, sailing and marinas in the Adriatic and the Mediterranean have an excellent future. He pointed out that Montenegro’s advantage in yachting tourism is due to the fact that traditional destinations for this form of tourism are over crowded and that prices are generally too high.
Montenegro and Belgrade stand on the top of a list of 11 tourist destinations not to miss in 2011. The list has been published in the tourism section of the Milan-based economic daily Il Sole 24 Ore.
Negotiations With Low-Cost Carriers
Montenegro Sold €180 Million Eurobonds
With the establishment of low-cost airline carriers, tourists and Montenegrin citizens would have the opportunity of travelling from Montenegro to European destinations at considerably lower prices. This was stated in preliminary negotiations between the working team of the government of Montenegro, including representatives from the Ministry of Sustainable Development and Tourism, the Ministry of Transport and Maritime Affairs, the public company Airports of Montenegro and the National Tourism Organization, and the management of Ryanair and Wizz Air.
Montenegro has successfully placed a five-year Eurobond issue worth €180 million ($256 million) – the Ministry of Finance said. This transaction was preceded by a three-day road show with visits to London, Geneva, Zurich, Frankfurt and Vienna, where representatives of the Ministry of Finance and the Central Bank met with a number of investors and presented economic and fiscal indicators on Montenegro. The issued bonds carry an annual fixed coupon of 7.25%.
Belgrade follows Montenegro on the list of the most popular tourist destinations in the world to visit in 2011, where the Serbian capital and Montenegro having been presented in the Italian newspaper as the world’s most attractive destinations when it comes to partying. Il Sole 24 Ore points out the Belgrade Design Week, which should be held on May 26-28, and its accompanying events, as one of the most important international festivals, well worth traveling to Belgrade.
Montenegro, as last time, attracted a large number of investors. The fresh Eurobond issue was more than twice oversubscribed. A total of 67 investors from 21 countries became bondholders. The issue’s lead managers were JP Morgan and HSBC, while London-based Linklaters acted as legal advisors. The Montenegrin government will use the bond proceeds to finance capital spending and refinance debt.
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