Brčko District in the coming period could become a new financial center in Bosnia and Herzegovina, thanks to the planned establishment of the stock exchange, which would have not only local but also regional significance, Sanela Hadžajlić, president of the Brčko District Chamber of Commerce, points out for Fena, adding that the chamber has been involved in this project from the beginning and is ready to support businessmen in preparing for work on the stock exchange.
As he states, the Chamber of Commerce wanted to initiate the project of establishing the stock exchange and supports the initiative.
– From the beginning, we have been consulted about the project and we are carefully working on the construction of a significant financial institution for Brčko District, and we are available to the initiators of the project for its further implementation. The establishment of the stock exchange is a significant step in the affirmation of Brčko District as a stable environment for business, which will not only lead to an increase in investments and the development of existing business entities, but also to the possibility of new investors and networking with existing businessmen so that Brčko District becomes a financial center that will enable investors to make safe investments – said Hadžajlić.
On the other hand, as he states, it will bring quality life to citizens, new jobs and will stop the outflow of labor force. According to her, this is a benefit not only for Brčko District but also for the whole of Bosnia and Herzegovina.
– The introduction of the stock exchange is a significant step in the affirmation of Brčko District as a stable environment for business, which will lead to an increase in investments and development of existing economic entities, but also to the opening of space for new investors. This means new job opportunities and a quality life for citizens, and stopping migration – said Hadžajlić.
The Chamber of Commerce, he adds, also plans to train businessmen in cooperation with the founders of the stock exchange, so that local companies will be ready for trading immediately after the establishment of the institution, reports Fena.
– We are already seeing great interest from businessmen, and through networking with foreign investors, additional business opportunities will be created for all parties involved. We will not wait for May or June, we will start earlier, so that companies will be ready as soon as the stock market starts functioning. The Chamber of Commerce is a center for businessmen and we try to give them all the necessary information – explains Hadžajlić.
Considering that the great interest of businessmen in the establishment and functioning of the Stock Exchange was expressed, the Chamber of Commerce planned education in cooperation with investors, that is, the founders of the Stock Exchange.
– We are in constant contact with them and we are making an education plan for members of the Chamber of Commerce in order to bring them as much knowledge as possible about the opportunities offered by the stock market. We are already seeing positive reactions from businessmen, great interest. The Chamber of Commerce is always a link between domestic businessmen and investors – she stated.
The broader economic context was analyzed by Snježana Zarić from the Department of Economic Policy, Theory and Development of the Faculty of Economics in Brčko, who reminds that theories of financial growth clearly indicate potential benefits, but also risks of financial market development, especially in small and new markets.
– Through theories of financial growth and development, which basically indicate the channels through which financial markets (including stock exchanges) and institutions, we see how stock markets can contribute to the development of an economy. Functional financial markets enable a more efficient allocation of capital by directing it towards productive projects and companies, ensures better risk management and diversification, which is especially important in the context of financing innovative projects that are by their nature riskier and often do not have access to bank financing – she pointed out.
She points out that the stock exchange in Brčko could make full sense if it is connected to the real sector and innovative industries, and if it is positioned as a regional platform open to neighboring countries.
In the context of whether the stock market can contribute to the development of a competitive market and increase investments, and whether there is a risk of monopolization and closed networks of politically protected actors, Zarić explains that in that case competition, innovation and the development function of the stock market would be undermined.
– Given that there are two stock exchanges in BiH – Banja Luka and Sarajevo, both of which have a low level of liquidity in terms of the ratio of turnover and market capitalization and generally weak secondary trading of shares, the Brčan Stock Exchange could become a generator of local development, and of the development of BiH. This could only be realized if it was accompanied by the establishment of a free economic zone in Brčko. This could encourage the development of innovative and export-oriented industries, which could be financed through the Brčan Stock Exchange. In such circumstances, the real and financial sectors would grow and develop in parallel.
He explains that the establishment of the stock exchange can increase savings and investments, but its effects will be limited unless there is technological progress.
– On the other hand, long-term economic growth can be fostered by investing in human capital, research and development and innovation. Therefore, if the Stock Exchange in Brčko finances innovative projects and encourages companies to invest more in research and development due to easier access and lower capital costs, it could contribute to the long-term economic growth of the local economy. Nevertheless, expectations should be kept realistic, bearing in mind the past experiences of the Banja Luka and Sarajevo Stock Exchanges. This project is very significant, not only in Bosnia and Herzegovina, but also in Europe, and in terms of competition, because they invest in innovative, technologically advanced companies – she said.
At a time when the Southern Gas Interconnection, American interest in infrastructure projects and energy are being increasingly discussed, the stock exchange in Brčko is increasingly being interpreted as part of a broader strategy of long-term economic and institutional engagement of the United States of America in Bosnia and Herzegovina.
Chargé d’affaires of the US Embassy in BiH, John Ginkel, emphasized the importance of establishing the stock exchange in Brčko District as an important step towards improving economic opportunities in BiH. He emphasized that the stock market can become a driver of economic growth, creation of new jobs and expansion of investments, and that investing in the capital market represents a new opportunity for companies and investors.
According to him, the experience of developed capital markets in the USA shows how much stock markets can contribute to the growth and competitiveness of the economy, and Brčko has the potential to set a new standard of innovation and trust.
There are currently two stock exchanges in Bosnia and Herzegovina – Sarajevo and Banja Luka. Sarajevo is primarily focused on the capital market in the Federation of Bosnia and Herzegovina. Although it represents the main market in FBiH, its turnover is relatively low compared to more developed markets. This means that liquidity is not high, and most transactions are symbolic or concentrated in a few well-known companies.
The Banja Luka Stock Exchange also records low turnover and a relatively small number of transactions, which further limits market liquidity. It is noticeable that investors, especially foreign ones, have a very limited presence, and the market mainly relies on domestic companies and investors.
