Serbia’s capital market may not be booming, but it has certainly been eventful this year. The spring kicked off with the sale of a package of shares in the transport company Lasta, which sparked weeks of media speculation about the identity of the buyer behind the “collective account.” In the summer, Messer Tehnogas’ majority shareholder took the spotlight with two unsuccessful attempts at consolidating ownership.
Autumn saw successful ownership consolidations in smaller, yet notable companies like the Jaroslav Černi Institute and the orthopedic device manufacturer Rudo. By year-end, Napred Razvoj made waves with its acquisition of Energoprojekt Holding. However, despite all this activity, one key expectation remained unmet— the launch of corporate bonds, a move that state officials had promised at the end of 2023 but failed to deliver.
As Nenad Gujaničić, the chief broker at Momentum Securities, explains, significant change in the Serbian market is unlikely until higher-quality financial instruments are introduced and fundamental stock exchange principles such as trust and security are established.
Lasta’s uncertainty
The year’s early attention was on the sale of the City of Belgrade’s shares in Lasta for 560 dinars per share in February. By December 24, when Lasta went on strike, the share price had dropped to just 319 dinars. While there have been speculations about potential restructuring at Lasta and calls from workers for state support to purchase new buses and maintain operations, it remains unclear what the government plans to do with its stake in the company. The state, together with the Shareholder, Pension and Health Fund, controls roughly 55% of Lasta’s shares.
Messer Tehnogas’ attempted consolidation
According to Gujaničić, the most significant event on the Belgrade Stock Exchange in 2024 wasn’t Lasta’s sale or the quiet consolidations at the Jaroslav Černi Institute or Rudo, but Messer Tehnogas’ attempt to consolidate ownership. The German company’s efforts more than doubled the price of its shares, which significantly contributed to the Belex index’s strong performance. Gujaničić highlights that Messer Tehnogas adhered to legal regulations and good shareholder practices throughout, which is not always the case in local takeovers. Additionally, the company faced significant resistance from a large activist investor, a phenomenon more common in developed markets but rare in Serbia.
Strong performance despite low turnover
Looking at the overall performance, the Belex index returned over 30% in the first 11 months of 2024, marking its best result since 2007. Tehnogas led the market growth, but companies like Impol Seval, Dunav Osiguranje, Metalac and Jedinstvo Sevojno also saw significant gains. On the other hand, NIS shares, which were one of the few losers, saw a sharp decline after the company’s record profits in the previous two years.
Despite the impressive returns, Gujaničić draws attention to the market’s “dark side”—desperately low share turnover. This year, as in 2023, turnover remained below 30 million euros. For context, during the “golden years,” turnover was in the hundreds of millions, even billions of euros.
Corporate bonds: Delayed launch
At the start of 2024, there were high hopes for the launch of corporate bonds on the Belgrade Stock Exchange, a move promised by the state to inject new life into the domestic capital market. However, by year-end, these plans had been postponed, with reports indicating that a dozen companies are preparing to offer such bonds in 2025. Gujaničić notes that the launch of corporate bonds was part of the state’s long-term capital market development strategy, but it failed to take off in 2024.
Although NIS had initially planned to enter secondary trading with its corporate bonds by the end of the year, this will likely happen in the first quarter of 2025 instead. Gujaničić believes that without new, high-quality financial instruments and a focus on ensuring the trust and security of market participants, the market is unlikely to experience substantial growth.
The future of Serbia’s capital market
Summing up the year, Gujaničić states that while market growth is possible, it is often the result of ownership consolidation, a trend that has persisted since the global economic crisis. With a limited number of investment alternatives and a small volume of shares available for trading, attracting more participants and increasing turnover remains a challenge.
Looking ahead, Gujaničić remains cautiously optimistic. If new, quality investment opportunities emerge in 2025, this could signal a turning point for the Serbian market. Otherwise, the market will continue to stagnate, with changes in the index’s value being more of a reflection of the limited opportunities available than any real shift in market dynamics.
