Significant international professional investors will have Serbia on their radar for potential investment.
Finance Minister Sinisa Mali announced that Serbian bonds have received another confirmation of their value and quality in the global market as they are listed for potential inclusion in the JP Morgan Global Diversified Index.
“This is of multiple importance for Serbia. By including our country’s government bonds in JP Morgan’s index of developing countries’ sovereign bonds, significant international professional investors will have Serbia on their radar for potential investment”, the minister specified.
“All serious investors follow JP Morgan’s indices. The index includes dinar-denominated government bonds that are regularly traded, with fixed coupon rates and that can be easily accessed by foreign investors”, explained Mali.
According to him, the publication of the results of the monitoring of the government bonds of the Republic of Serbia for potential inclusion in the GBI-EM Global Diversified index is planned in the second quarter of 2020, and it is expected that the Serbian bond will confirm its valuation. After the inclusion of bonds, the participation of Serbian bonds in the index will be between 15 and 30 p.p.
He further explains that JP Morgan’s index of sovereign bonds of developing countries should confirm that the Republic of Serbia has made significant progress in enhancing the liquidity of the secondary market for government securities by issuing benchmark bonds.
“JP Morgan’s explanation states that Serbia has made significant progress in strengthening the secondary market liquidity of its government bonds. Consolidation of the domestic bond portfolio, as well as the issuance of benchmark bonds, have resulted in increased demand from foreign investors and a significant increase in the volume of the secondary market over the last two years”, said Minister Mali.
He added that further progress was made in the process of dinarisation, the currency structure of public debt was improved through an increased share of dinar-denominated debt in the total public debt of the Republic of Serbia and the maturity of government bonds issued on the domestic market was extended.
Mali points out that he and his team’s approach in the Ministry of Finance is that the domestic capital market is developing first and foremost, and that Serbia should be present in foreign markets as well, and thus be recognized as a country that has good financial instruments to offer to the world to investors.
“We regularly follow all the trends on the world markets and stock exchanges and we want to be part of that process that greatly affects the development of a country and the evaluation of its economic and economic power”, the minister said.
The Minister recalled intense legislative activities regarding the development of the domestic capital market. For the next week, he announced that the Assembly’s agenda will also include the Bill on
Amendments to the Capital Market Law, which will enable the base and structure of potential investors to invest in domestic securities to be increased.
“The proposed changes bring the provisions of the Capital Market Act into line with the Law on Public Debt. The introduction of a foreign legal entity that performs clearing and settlement operations in accordance with the law governing public debt, provides an additional opportunity for foreign investors and funds to invest in domestic securities and the Serbian capital market in a fast and efficient manner”, the Minister said also that these changes will increase the attractiveness of domestic securities, but also provide diversity for investors.
He also recalled that Serbia recently opened Chapter 4 in its negotiations with the European Union, which concerns the free movement of capital, and thus our country has been recognized as having the conditions to connect with European markets from the moment of accession to the European Union.
Mali also reminded that the negotiations on the inclusion of Serbia in Euroclear Bank (Euroclear Bank) are intensively negotiated, which will further increase the demand for our securities, and that he expects that this will be realized by the end of this year.
“All of the above, along with the increased credit rating given to us by leading rating agencies like Standard and Poor’s and Fitch last year, provides us with a platform from which we can successfully plan for economic growth this year, as well as the realization of the Investment Plan Serbia 2025”, Alo reports.
