The Macedonian Stock Switch (MSE) is not running successfully fap turbo robot. True, some of the parameters which we use to measure the succeeder of a stock convert have late improved in the MSE. For example, the monthly money volume has inflated together with the number of transactions. But this is a far cry from winner fap turbo robot.

Who is to blame? Is the current direction of the MSE rough?

I do not think so. Really, I think the MSE has an select management team, doing their best to incorporate new trading proficiencies and to list new firms fap turbo robot. The jobs lie elsewhere.

A stock shift is a very grand financial commercialize. It is a extremely effective and visible instrumentate of financing. In the West, it is used to finance most of the needs of corporations, agency above financing accessible from banks. Someones and firms save some of their income and invest it. The stock switch is meeting grounds for savers wishing to invest their savings - and firms looking for investments.

Another function of stock replaces is to assist governments in financing their internal taking up requirements. Governments betray obligations (called bonds) to investors through the stock exchanges in their countries. A stock convert is, therefore, an necessary tool for re-financing national debt.

But a few conditions must reign before a stock exchange functions the right way.

The most significant prepare is the existence of a significant, growing economy in the stock exchange’s country. Investors flock to robust thriftinesses and shy away from sickly ones.

On the face of it, the Macedonian economy belongs to the latter category. High unemployment, low savings, retarded growth, a gaping trade and payments deficits. But this is an optical illusion. The thriftiness is in much ameliorate circumstances that most Macedonians would care to admit. The unemployment figures are tipped. They reflect causes to evade paying social taxes - not real unemployment. The economy is growing, even by official estimations. The black economy is growth even faster. The deficits are covered by extended capital infusions from donor areas. Macedonia is getting more worldwide accredits per capita than Russia. It is always convenient to blame the worsening economic climate - but the cold, objective calculates do not bear this out.

When an economy is growing - the benefits of companies (including those listed in the MSE) will grow with it. This makes the shares of these companies an interesting buy.

Since no one is buying - we must look for the trouble elsewhere.

A prospering stock exchange is linked to the macrocosm of the right micro and macro economic management. Macedonia has more than its share of troubles in this obedience.

The process of transmutation of businesses with social capital had four basic flaws:

first, it brought out no new management, ideas or special to the beleaguered firms which were “transformed”. The market simply does not think that they were translated. The same somebodies run the same shows under a another hat.

Second, such transmutation violates the construct of Hierarchy, a chain of bidding.

It blurs the preeminence between labour (workers) and capital (owners). What is wrong with that is that a ship must have a chieftain - and only one. Someone must have the self-assurance and the province. Collective management is no direction at all.

Moreover, innovation transfer and resurgence are all prevented. What change could come from the same set of worn out managers? How can thousands of owners decide to worsen the terms of the workforce - if possessors and labourers are one and the same? So, management is alloyed by impertinent, non-economic considerations: power struggles amongst groups of workers, social considerations and political ones.

We known one villain. The other one is high (real) interest rates. When pursuit rates are high, three forces preclude the resuscitation of the stock exchange:

First, firms have high financing expenses (interest payments) - which reduces their nets. Second, it is not worthwhile to borrow money and to invest in shares.

Third, it is more tempting to invest money in bank deposits, yielding high interest rates - than in shares. High pursuit rates are the poison of stock exchanges.

The same is true for low savings rates. If someones and firms do not save - there is no capital available for investment in stocks.

This, exactly, is the current office in Macedonia : impossibly high involvement rates coupled with exceedingly low savings. There is basic mistrust between clients and their banks. They choose other ways of keeping their money.

But all the above is far from depleting the list of pre-conditions for the proper functioning of a stock convert.

Investors must have timely, accurate and full entropy about the firms that they invest in. This will provide them to reply in real time to growings in the company and to prevent losses. This will also make it difficult to cheat them - which is were we come to the question of accounting standards. Only lately have the accounting rules in Macedonia been revised to conform to the Western systems of rules of accounting. Even now, the similarity is very slight. Macedonian firms maintain a double accounting system. One set of books is tax-driven. It is thought to show losses or profit at the whim of the management. An elaborate scheme of hidden reservations lies at the heart of the typical financial program lines of the Macedonian firm. Another set of books - if they are kept at all - meditates reality. This is an enormous barrier to foreign investment - and foreign investors are the driving force in every modern stock replace.

The trust of investors in the stock exchange is based on legislation to protect their attribute rights against the firm’s management’ against the authorities and against other investors who might wish to rig the market or manipulate the prices of stocks.

But legislation without an effective judicial and law enforcement systems is like a stock exchange without money. To enforce dimension rights in Macedonia takes ages and even then the outcome is not certain. Laws, regulations are in their embryonic stage and some of them seem to have had an abortion: they were hastily and unwisely copied verbatim from legal codices of other countries (Germany, Britain).

Last - but definitely not least - is the existence of a fair, transparent and non-corrupt marketplace. The stock exchange, the banks, the restrictive authorities, the police and the courts have to be above suspicion. For the market to be utterly efficient - it must be utterly free of any ulterior considerations and motives. Corruption distorts the market’s allocative mechanics and powers. It is easy discernible in dealings in the stock exchange for all to see. A stock exchange is, after all, the showcase of the local economy.

But there is a problem which predominates above all other troubles and it is almost endemic to Macedonia. It helps to explain much of the predicament of the stock exchange in Skopje. It is the fact that the market is missing its most significant player: the Government.

Investors - both foreign and domestic - look for the Government to be going in the local stock exchange. Governments throughout the world use their stock exchanges to sell shares of state-owned enterprisingness to their populace. The stock change becomes a mechanism for the distribution of the national wealth - as embodied by the state owned enterprises - to all the citizens. As we said before, governments also use the stock exchange to borrow money from their citizens.

The Government of Macedonia does neither. It totally ignores the MSE. Not one company was privatized through the MSE. Not one Denar was borrowed from a Macedonian citizen through it. A government’s activity in the stock replace is proof that the government believes in it. Therefore, if it does not operate in the stock exchange - it proves that it does not consider in it. If the government does not believe in the stock exchange in its own country - why should the investors believe in it?

There are a few additional structural characteristics which are considered to be the assay-mark of a healthy stock replace. But those are the by-products of all the above mentioned conditions.

A stock exchange must be liquid so that investors would be able to convert their shares into cash easily and expediently. It must include many investing options - professionally put, it must be varied. This will allow the investors to prefer from a variety of investing and also to reduce their risks by dividing their money among a few types of investing.

The management of the stock exchange can help it by presenting capable trading proficiencies, computerized trading and colony systems and so on. The faster investors meet their money when they betray their shares - the more they will be inclined to operate in the stock replace that allows them that. The easier it is for them to waste their assets by meeting buyers - the more they will choose to work in that stock exchange.

Investing in the stock replaces in the markets of the emerging economies has been an awkward decision in the last three years. Stock replaces from Russia to Hungary and from Lithuania to Poland have jeered wildly since the end of 1993.

They resembled a roller coaster in their performance, going up and down by tens of percents annually. There are exceptions to this rule. The Ljubljana Stock exchange, for instance. The selling volume there has gone up 10 times since December 1993 - and the market capitalization is up 30 times. But this is because of the performance of the general economy in Slovenia. In Croatia, the government is privatise its holdings in state possessed companies by auctioning shares to the public through the Zagreb Stock Exchange. This has availed it a lot.

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