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MACEDONIAN STOCK EXCHANGE Evgeni Zografski CEO

MACEDONIAN STOCK EXCHANGE Evgeni Zografski CEO. MACEDONIAN STOCK EXCHANGE AND CORPORATE GOVERNANCE SOUTH-EASTERN EUROPE CORPORATE GOVERNANCE ROUNDTABLE OHRID,JUNE 2004. LEGISLATION. HIGH LEVEL OF COMPLIANCE WITH IOSCO PRINCIPLES REGULATION CLOSER TO EU INVESTMENT DIRECTIVES

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MACEDONIAN STOCK EXCHANGE Evgeni Zografski CEO

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  1. MACEDONIAN STOCK EXCHANGE Evgeni Zografski CEO MACEDONIAN STOCK EXCHANGE AND CORPORATE GOVERNANCE SOUTH-EASTERN EUROPE CORPORATE GOVERNANCE ROUNDTABLE OHRID,JUNE 2004

  2. LEGISLATION • HIGH LEVEL OF COMPLIANCE WITH IOSCO PRINCIPLES • REGULATION CLOSER TO EU INVESTMENT DIRECTIVES • ESTABLISHED LEGAL FRAMEWORK • INDEPENDENT REGULATOR (SEC) • TWO SRO’S (MSE JSC DEMUTUALIZED;CSD MEMBER OWNED JSC) • MODERN ELECTRONIC TRADING SYSTEM (BEST) • FULL SECURITIES DEMATERIALIZATION • EFFICIENT SYSTEM OF CLEARING AND SETTLEMENT

  3. LEGISLATION • NEW INSTITUTIONAL FRAMEWORK IN 2004 • DEFINING PUBLICLY HELD CO. (188 JSC) • MANDATORY DISCLOSURE • NEW LISTING REQUIREMENTS ON MSE

  4. CHARACTERISTICS OF THE MACEDONIAN CAPITAL MARKET PRIMARY MARKET • UNDERDEVELOPED • NO IPO ON MSE SO FAR SECONDARY MARKET • SECONDARY PRIVATIZATION THROUGH MSE • CONCENTRATION OF OWNERSHIP THROUGH MSE • STILL IN INITIAL STAGE OF DEVELOPMENT • MANDATORY LISTING FOR CO.THAT FULFILL MSE LISTING REQUREMENTS BY THE END OF 2004 • MARKET OF COMPANIES DOMINATES OVER MARKET OF SHARES

  5. CHARACTERISTICS OF THE MARKET OFFICIAL MARKET (MANDATORY LISTING FOR CO.BY THE END OF 2004) • 58 LISTED COMPANIES (MARKET CAPITALIZATION 300 MILL. €; 7% OF GDP) • THE MARKET VALUE OF LISTED COMPANIES INCREASED 35% (AROUND 1/3 OF THE NOMINAL VALUE) • 4 GOVERNEMENT BONDS AND 1 CERTIFICATES (MARKET CAP.340 MILL. €) UNOFFICIAL MARKET • MANDATORY TRADING OF ALL SECURITIES TROUGH MSE BY THE END OF 2004 • 110 PUBLICLY TRADED COMPANIES • PRIVATIZATION OF GOVERNMENT RESIDUAL SHARES (70 RESIDUAL SHARES TO BE OFFERED BY THE END OF 2004)

  6. TRANSPARENCY & DISCLOSURE • INFLUENCE FROM THE PAST • CLOSELY HELD CO.TO ACT AS PUBLICLY HELD CO. • ENSURING EFFECTIVE DISCLOSURE IS KEY TARGET/OBSTACLE • PUBLICLY HELD CO.TO BECOME AWARE THAT THEY COULD BENEFIT FROM THE PROPER DISCLOSURE

  7. TRANSPARENCY & DISCLOSURE DISCLOSURE OF LISTED COMPANIES: • AUDITED ANNUAL REPORTS; • SEMIANNUAL UNAUDITED REPORTS; • QUARTERLY UNAUDITED REPORTS;

  8. TRANSPARENCY & DISCLOSURE DISCLOSURE OF LISTED COMPANIES: • DISTRIBUTION OF THE NET-PROFIT • DIVIDEND CALENDAR • CHANGES IN THE MANAGEMENT • CHANGES IN THE CAPITAL STRUCTURE • CONTRACTS, LOANS, AWARDS, LICENSES, ISO CERTIFICATES • DECISIONS OF THE GENERAL ASSEMBLY • DECISIONS FOR BUY-BACK • NEW ISSUES OF SECURITIES

  9. TRANSPARENCY & DISCLOSURE • DISCLOSURE OF LISTED COMPANIES • Denials of price-sensitive information • Shareholders with more than 10% of outstanding shares and every further acquire of more than 5% • Yearly information about the percentage of shares owned by the management

  10. TRANSPARENCY & DISCLOSURE DISCLOSURE OF PUBLICLY-HELD COMPANIES: • Quarterly information: • General data • Changes in equity • Legal status • Price sensitive information • Semiannual information: • Semiannual unaudited report • Annual information: • Audited annual report

  11. TRANSPARENCY & DISCLOSURE EFFECTS OF MANDATORY LISTING: • Higher transparency: • Financial statements of 80 companies published • 78 price sensitive information of 42 companies published • Greater protection of the minority shareholders • More efficient implementation of the principles of corporate governance

  12. TRANSPARENCY & DISCLOSURE • 22 delisted companies in 2004 • Due to lack of transparency, 19 companies were delisted in 2004 • Number of listed companies as of May 31,2004: 58

  13. DISSEMINATION OF INFORMATION • All price sensitive information are available on the MSE web page (in 5 months of 2004 over 20,000 visits of the MSE web; 56,000 page views;7,000 unique visitors) • Brokerage houses are informed of all price sensitive information trough BERZA –NET • Vendors (Reuters;Bridge)

  14. FUTURE PROSPECTS MSE CODE OF CORPORATE GOVERNANCE • TO BE DRAFTED BY THE END OF 2004 (WITH ASSISTANCE OF DUTCH GOVERNAMNET AND USAID CG&CL PROJECT) • IMPLICATION ON LISTED CO. • IMPACT ON THE PROCESS OF CG

  15. MACEDONIAN STOCK EXCHANGE Inc. SKOPJE E-mail:mse@mse.org.mk; www.mse.com.mk

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