Capital Marktets
We Introduce
CAPITAL MARKETS
Trade on the Stock Exchange
During 2012, turnover on the Montenegrin stock exchange amounted to only € 32,44 million, thus showing a decline of 44.9% in comparison with the same period in 2011. The average monthly turnover during 2012 was only € 2.71 million, which was much lower than the average monthly turnover in 2011 (€ 4.91 million). This indicates that the capital market crisis is not yet over. The decline in the turnover of the stock exchange during 2012 was also followed by a decrease in executed transactions. During 2012, a total number of 7,113 transactions were completed. This was 53% less than during the same period in 2011 (13,386 transactions). During 2012, three types of securities were traded: company shares, privatization-investment fund shares and bonds which included Government bonds and Ministry of Finance bonds. The greatest turnover was recorded in the area of company shares (66.3%), followed by bonds (23,4%). The total turnover of investment funds amounted to 10,3%. The shares of companies and investment funds recorded a fall in comparison to the same period last year, while bonds recorded an increase (321% respectively). Looking at shares on an individual company basis, the highest monthly trade volume was recorded in March, during 2012; Aluminum Plant shares reached a volume of 3.98 million through a series of block transactions. Apart from this, the most traded shares during the last six months were those of Telekom Montenegro
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which achieved € 1.11 million on the A list.
Stock Exchange Indices The Montenegrin stock exchange uses the two indices, MONEX20 and MONEXPIF. In March 2012, the Montenegrin Board of Directors adopted a new methodology for calculating the indices MONEX20 and MONEXPIF. Their aim was that, through the adoption of a new method of calculating the index, a more accurate representation of the capital market situation could be reached. The new method that has been adopted for calculating the index is available on the official website of the Montenegrin stock exchange. The value of the Montenegrin Stock Exchange, MONEX20, upon which MSE’s 20 most liquid companies are traded, had started with its constant declining and permanent oscillations in 2012, to reach its lowest value of 8.138 points on July 27th. Afterwards, the index kept rising until the end of the year, reaching its highest annual value of 9.184 points on December 31st. Index growth continued in January 2013, when it reached its peak of 10.247 points on 16th of January 2013. Variations in index value have influenced all of the changes shown by shares represented in this index. In particular, the following were most affected: Telekom Montenegro, Jugopetrol Kotor, Prva Banka, Montenegrin Electric Transmission System, Atlas Bank and the Container Terminal. The value of MONEXPIF index has declined steadily with just a few oscillations since the beginning of
2012. It reached its highest level on 2 February with a total of 4.273 points. The lowest point was recorded on 21 June with 3.022 points. In January 2013, the index also continued declining. The index value was influenced in such a way that a similar trend was evident in all of the privatization investment funds.
Privatization – Investment Funds on the Stock Exchanges The total volume of trade involving PIF shares during 2012 amounted to € 3.344 million, which is 24% less in comparison to 2011. In total, 1.389 transactions were made during 2012. The most actively traded shares during this period were Atlas Mont (35.148 million shares), while the least traded were those of HLT (1.306 million shares). ■
Figure 1: MONEXPIF 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Jan-12
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Figure 2: MONEX 20 12,000
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While one part of the world is still discussing potential causes of climate change, the other has already started tackling the issue, by adapting to it. This particularly stands for the visionaries in the global business sector. But what does this mean for Montenegrin entrepreneurs? Many would agree that the climate has significantly changed over the last few decades. We can feel the change and recognize it as extreme weather events, manifested as snow and storm surges or heat waves resulting in costly and damaging droughts and floods. Unfortunately, experts say this is just the beginning. It is projected with a great deal of certainty that Montenegro will face even greater impacts of changing climate – the Mediterranean will be particularly affected, becoming hotter and drier, while Northern regions can expect higher levels of rainfall. Given the interdependencies between climatic conditions and production processes and services, it is evident that these changes in climate patterns may affect many businesses. With this in mind, business as usual should no longer be an option.
The Risk Disk
DOING BUSINESS IN A CHANGING CLIMATE – building a case for adaptation (1)
by MSc Slavica Nikolic and MSc Dragana Mileusnic
On the other hand, climate change adaptation should not only be about vulnerability and risk. It is also about opportunities and benefits. Case studies that we examined demonstrated that it is cost effective, it helps avoid operational disruptions, but it can also bring expansion to new markets and services, reputational benefits and competitive advantage over companies in the same industry that fail to address the issue. However, we should not overlook the fact that both risks and responses vary according to sector. Those identified as the most vulnerable are agriculture, energy, tourism and forestry, coinciding with Montenegro’s key
Fortunately, there are numerous other examples of good practice that can be a valuable lesson for Montenegrin companies. We explore these in a sequel coming up in the next issue.
Effects of Climate on...
(Source: Pew Center on Global Climate Change)
The graphic above demonstrates how climate change can affect different aspects of business processes – core operations, value chain and broader network. Therefore, in order to adapt, companies need to evaluate risks in each segment and integrate these when planning for further activities. It is also important not to forget that these risks can be diverse in their character. They can come from physical and operational changes in the environment, causing shortages in raw materials and damage to other assets. None the less, they may result from the regulatory framework for climate change mitigation that is a part of Montenegro’s international legal commitment. This may trigger further financial, market, political and reputational risks.
strategic development areas. In practice, this means that businesses relying on water will be affected due to projected water scarcity. This will reflect on energy supply and demand, a sector that is already susceptible to even minor disturbances. Thus, an exemplary adaptation response for some companies may be to consider including more solar sources in their energy mix.
BROADER NETWORK ...public/private electri and water utilities and other infrastructure VALUE CHAIN ...supples of natural resources and raw materials
CORE OPERATIONS ...disruptions to supply chain
...other inputs into production
physica assets, production processes or O&M
...workforce and changing lifestyles
...customers’ access to product
...customers and demand for goods and services ...government -supplied services
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