EBRD plans new issue of dinar bonds despite problems with loan placement in domestic currency
EBRD plans on re-issuing bonds in dinars, even though they have a hard time launching them, noted Aleksandra Vukosavljevic, manager of the financial sector at the European Bank for Reconstruction and Development (EBRD), at yesterday’s 16th international conference of the Belgrade Stock Exchange. Speaking of, EBRD became co-owner in 2006 and has 24,4% of the bank’s shares.
You will be surprised at how soon the commencement of privatization of “Komercijalna Banka” will be announced. If privatization didn’t exist as an objective, the EBRD wouldn’t be a shareholder. The deadlines for privatization have expired, and the beliefs are that it isn’t a right time due to the opportunity on the market, to sell this, second in size of property bank in Serbia. EBRD is for the market way of selling the bank, that is, in the capital market – said Vukosavljevic.
-We have issued the bonds in dinars so we could also market the loans in dinars. Unfortunately, nobody wants to take them, so now we have a liquidity surplus in dinars – Vukosavljevic said, adding that the first issue of EBRD dinar bonds was a relatively modest amount, and that there was enough investors.
To the journalist question what is the reason why those who need loans don’t want them in dinars, she replied that they knew in front they would have a placement problem, because the loans in dinars are more expensive than market ones.
– The Banks have liquidity surplus, and in result of it there has been interest reduce. The EBRD has shown a market behavior, and with the calculated risk, the price of our dinar loan has been higher than those deposited by banks. The problem is that the state and individuals are mostly borrowing in euros – said Vukosavljevic.
Siniša Krneta, director of the Belgrade Stock Exchange, pointed out that the stock exchange trading is still low and that it still hasn’t recovered after the crisis.
– During the better days, daily trading reached ten million euros in 2007, but now when we manage to get five million euros at a monthly level, we consider it a success. The goal should be transformation of the capital market into initiator of the national economy. A modern and sustainable capital market generates new economic growth, new development and new employments. 30% growth of the capital market increases gross domestic product, in the same percentage, said Krneta, adding that the biggest problem is the absence of initial public offers (IPO) and the lack of better investment alternatives.
Jorgovanka Tabakovic, Governor of the National Bank of Serbia (NBS), stated that the central bank will continue to support the development of the stock market and that it will do everything to make the market a region leader again.
– We need to have faith in the stock market and fight for its ideas and projects. We need to admit that there isn’t a lot of market material and find the reason behind it. Is it because of the Companies Act and deliberately embedded flaws who are not hidden mistakes that make the change in the ownership structure within a certain society, with a respected lawyer’s creativity, in such a way, where many lose and few gain – asked Tabakovic.
She always points the ways joint stock companies are closing and how there isn’t enough materials for trading on the stock exchanges. According to her, the goal is for Serbia to be a country where citizens will cease to seek their investment chances across the border, but rather in Serbia.
