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2002 - A Successful Year For The Ljubljana Stock Exchange (LJSE)

Date 03/01/2003

From the point of view of the capital market in Slovenia, the year of 2002 was undoubtedly a very important one. Some of the paramount events of the year were the takeover of the Lek pharmaceutical company, the record high of the SBI 20 Index and the record yearly turnover of the Ljubljana Stock Exchange. Moreover, LJSE continued to apply its technology to other Exchanges of the south-eastern Europe, and launched its own electronic information dissemination system - SEOnet. Less than a year later, this system has been regularly used by already 74 subscribers (31 issuers from the official market, 41 free market issuers, and by 2 institutions).

The year of 2002 was, without a doubt, a year of record-breaking results. The SBI 20 Index reached its record value at 3,548 points on 8 November, and on 16 July the record daily turnover of SIT 11.5 billion was registered. The total securities turnover by 31 December amounted to SIT 481 billion whereas a year ago it climbed to SIT 349 billion (up by 38%). The market capitalisation as of 31 December 2002 totalled SIT 2,174 billion, and grew by 58% in comparison to its value of the previous year, at SIT 1,380 billion. Thus, the LJSE market capitalisation rose to 27% of the GDP of the year 2001. Likewise, also the mutual funds experienced record-breaking inflow as their value increased by SIT 28.78 billion in 2002. The total assets of the mutual funds as of 31 December amounted to SIT 54,5 billion, still relatively low in comparison with the level of the bank deposit saving.

The Stock Exchange admitted altogether 40 new securities, out of which there were 14 shares, all listed on the free market (the reorganised Authorised Investment Funds not included), and 26 bonds (22 listed on the official market). As expected, the number of stock exchange members was reduced in 2002, to 27 (as in December 2002).

LJSE continued its strategy of co-operation with other Exchanges of the western and south-eastern Europe; its own BTS electronic trading system was installed at the Exchanges of Banja Luka, Sarajevo, Skopje, Podgorica and in Varazdin respectively. The memoranda on the exchange of information were signed with all of the above; on 10 December also with the Belgrade Stock Exchange. In words of Dr Drasko Veselinovic, President & CEO of the Ljubljana Stock Exchange, "this memorandum represents an important milestone, as the Belgrade Stock Exchange is the first Exchange which does not trade via the BTS system". LJSE is currently negotiating such exchange of data also with the Zagreb Stock Exchange.

In the future, the LJSE expects the Slovenian securities market to recover, on the basis of a more consistent tax policy. Furthermore, an increase in investments into mutual funds is expected, as interest rates decline. LJSE plans to continue its co-operation with the Exchanges in south-eastern Europe, with particular emphasis on those of the former Yugoslavia, as well as pursue further strategic integration with the Exchanges of the western Europe. The first issues of corporate bonds are under way (while government bonds and bonds issued by banks are already available) as well as of some new shares. New Rules and Regulations of the Ljubljana Stock Exchange were adopted, as they were confirmed by its Supervisory Board and the Securities Market Agency. The Rules will follow the provisions of the new Law on Companies (ZGD-F), and will define issuers' reporting in more detail.