IPO AS MECHANISM OF GROWTH AND DEVELOPMENT OF COMPANIES IN SERBIA

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The SAM organised panel discussion on investing in the Stock Exchange

How to invest wisely and make a decision on an investment, what Fintel energija’s IPO at the Belgrade Stock Exchange will mean for Serbia, why it is important for every company to consider an IPO as a tool for growth, and investing in the Stock Exchange from a perspective of private persons and legal entities – those were the key topics of the “How to Invest Wisely?” panel discussion organised by the Serbian Association of Managers.

Other topics of the panel, whose participants included Tiziano Giovannetti, Executive Director of Fintel Energija, Rade Rakočević, a SAM member and the owner of investment company Senzal Capital, Slobodan Đinović, a SAM Board member and CEO of Orion Telekom, Siniša Krneta, Director of the Belgrade Stock Exchange, and Ivana Stanković, a manager in PwC, also included a rate of turning an investment into money, as the crucial criterion for short-term investments.

We organised the discussion on investing in the Stock Exchange in the aim of raising awareness of the business community regarding this topic and motivating our members to consider investing in the Stock Exchange as a potential way of gaining additional income, as well as facilitating local private and family-owned companies to take into consideration “opening” towards potential investors as a mechanism of growth and development of their respective companies. We believe that this is a historic moment of the Belgrade Stock Exchange because after 80 years we will have a company that will issue an IPO and we want to promote this fact in public,” underlined Jelena Bulatović, Executive Director of the SAM, expressing gratitude towards Mr Tiziano Giovannetti from Fintel Energija, who came to present his considerations and reasons for this step.

An IPO should primarily be observed from the aspect of strategic interests of the issuing company.

An Initial Public Offering represents a complex activity of raising capital in the market to finance growth and development of the issuing company. In market economies, that act is a common strategic move of proactive companies and represents an alternative to own or borrowed sources of financing. From a macro aspect, IPOs affect competitiveness, primarily of the private sector, while on the other hand they make the financial system of a country more robust and resilient to external stresses. A lack of IPOs in Serbia in the past 8 decades largely explains the current competitiveness of the private sector in the country. A strategic determination and efforts of the Belgrade Stock Exchange are focused on motivating and educating aimed at facilitating a series of IPOs from the private sector, in order to complete the Serbian financial market in the function of growth and development of the private sector, as well as of the national economy as a whole,” said Siniša Krneta, Director of the Belgrade Stock Exchange.

In the circumstances of low savings interest rates and the inflation rate of three percent in Serbia, investors need to turn to other investment options, in order not to lose money by keeping it in banks.

Real estate is still the first choice for investing, although a yield of 5 to 7 percent from leasing is not high enough for non-liquid assets, which quickly lose their value, while investments in the stock exchange in the country and abroad and in private companies and start-ups are still not an option, although they may bring much higher yields. Investing in the stock exchange is a matter of regular business conduct worldwide and I expect more investors from Serbia in trading shares in the coming years,” said Rade Rakočević, a SAM member and the owner of investment company Senzal Capital.

Fintel Energija a.d. is to issue its IPO at the Belgrade Stock Exchange in the upcoming period.

Fintel energija’s holding company is listed at the Italian Stock Exchange, which is a member of the London Stock Exchange, so we wished to apply our positive experience on the local market. The idea of listing our legal entity in Serbia emerged a year ago and recently we have completed all the necessary procedures for issuing the IPO in early June. So far we have invested EUR150mn in renewable energy sources in Serbia and with the IPO we will not sell a stake but raise capital from potential investors so that we can invest further in Serbia,” explains Tiziano Giovannetti.

Smart investing is when you invest in accordance with a risk you take. In my case, it means investing in the long run, relying on business you are familiar with, namely firms close to what you know and, above all, trusting yourself, based on your knowledge, stock exchange trends and a period when you invest. Your own conclusions regarding the stock exchange and shares will tell you how to act. When we sum up, it is a risk, knowing the industry you enter and long-term investments – that is smart investing,” says Slobodan Đinović, a SAM Board member and CEO of Orion Telekom.

Together with the Belgrade Stock Exchange, PwC participates in the project of modernising the Stock Exchange and thus developing the capital market in Serbia.

We wish to raise awareness among companies, private persons and other stakeholders regarding the capital market, IPOs and benefits and risks in that process. PwC will educate interested companies on what needs to be considered, analysed and learnt in order to make an informed decision on an IPO. Thos with highest ambitions and capabilities will be provided with specific support on the road to the stock exchange,” said Ivana Stanković, a manager in PwC.

Business Talk is a format of the Serbian Association of Managers where leading companies share their experience and good business practice on topics of relevance for facilitating business progress and improving the community and the society as a whole.

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