First Securities Market Founded
BELGRADE, Yugoslavia (AP) _ The first securities market since the Communists took power 43 years ago was formally established today, and one newspaper reported the exchange will develop into a full-fledged stock market.
The Financial and Securities Market, to begin operating Dec. 31, will at first deal only in short-term documents such as banking certificates and will initially be used only by financial institutions, said the official Tanjug news agency.
It will eventually evolve into a full stock market, allowing individual citizens to participate, reported the government-supervised newspaper Borba.
″We are preparing to have in the future a stock market like any other ... which will also be connected to international markets,″ said Dragutin Gajic, an advisor in the Yugoslav National Bank, in an interview with the daily.
The exchange is a major landmark in efforts of Premier Ante Markovic to radically reform Yugoslavia’s stagnating economy and bring it into line with Western economic practices.
The government is seeking parliamentary approval for legislation allowing government-owned and private enterprises and other institutions to issue stocks and bonds, which would be dealt with on the newly-established exchange.
Founding of the exchange was one of the conditions set by the International Monetary Fund at last week’s round of negotiations aimed at providing Yugoslavia with continued financial support, according to press reports.
The Communists abolished Yugoslavia’s three existing stock exchanges in Belgrade, Zagreb and Ljubljana when they created a centrally planned economy along Soviet lines in 1946.
Yugoslavia is currently faced with an annual inflation rate approaching 1,500 percent, a $17 billion foreign debt and rising unemployment. Economic performance has stagnated throughout the past decade.
Markovic’s 6-month-old government is committed to introducing market mechanisms into the economy as a way out of the crisis and has already allowed for large-scale private enterprise and foreign investment. A sweeping reform of the country’s innefficient banking system is also under way.