MACEDONIAN STOCK EXCHANGE

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

• HIGH LEVEL OF COMPLIANCE WITH IOSCO PRINCIPLES
• REGULATION CLOSER TO EU INVESTMENT DIRECTIVES
• ESTABLISHED LEGAL FRAMEWORK
• INDEPENDENT REGULATOR (SEC)
• TWO SROS (MSE JSC DEMUTUALIZEDCSD MEMBER OWNED
  JSC)
• MODERN ELECTRONIC TRADING SYSTEM (BEST)
• FULL SECURITIES DEMATERIALIZATION
• EFFICIENT SYSTEM OF CLEARING AND SETTLEMENT

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LEGISLATION

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

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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

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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)

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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

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TRANSPARENCY DISCLOSURE

• DISCLOSURE OF LISTED COMPANIES
• AUDITED ANNUAL REPORTS
• SEMIANNUAL UNAUDITED REPORTS
• QUARTERLY UNAUDITED REPORTS

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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

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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

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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

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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

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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

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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 views7,000
  unique visitors)
• Brokerage houses are informed of all price
  sensitive information trough BERZA NET
• Vendors (ReutersBridge)

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FUTURE PROSPECTS

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

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MACEDONIAN STOCK EXCHANGE Inc. SKOPJE E-mailmse_at_m
se.org.mk www.mse.com.mk