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In the study, the impact of five macroeconomic factors on the capital market of the Republic of Serbia was explored. The focus was on factors that have been identified as significant for the development of the capital market but with differing opinions regarding their direction of influence. Specifically, the focus was on GDP, inflation, money supply, interest rate, and exchange rate. The research results indicate that the Belex15 index does not show long-term cointegration with GDP, IPC (inflation), and M3 (money supply). However, there is a significant influence of previous interest rate values and the exchange rate on the capital market of the Republic of Serbia. More precisely, there is a positive impact on interest rates and a negative impact on the exchange rate.

We are witnessing the transformation of the financial instruments industry and the processes taking place in the capital market, which have initiated a new trend in securities business. The contemporary progress of the global digital securities market is characterized by interactions between rapid technological innovations, changes in investor habits and competition among technology giants. The research subject is supported by the fact that digital securities offering becomes a profitable business model available on blockchain platform, making securities the most interesting financial instruments in the 21st century. The aim of the research is to overview characteristics of digital financial instruments as a consequence of the difference in territorial areas and legislation, as well as how this affects the potential and challenges of development in the capital market. Description method, analysis and synthesis technique, as well as the documents content analysis in the relevant area, were used for the purposes of the research. The result of the research confirms further development of digital securities in a very challenging environment and resources mobilization through alternative funding methods.

Initial public offering (IPO) presents a special mode of emission when a company for the first time publicly emits shares that are available to a wide scope of investors, institutions and individuals. IPO is a huge step that companies are willing to take only after a detailed analysis of their current situation, as well as advantages, disadvantages and potential risks that this action entails. The greater part of initial public offering is done through investment banks as specialized and highly professional financial institutions, which help the issuers when estimating opportunities for placing securities on the primary capital market and also offering various other services. The aim of this paper is to present the particularities of the IPO process in accordance with the legal regulations of the United States of America. Since determining the adequate price of the shares of IPO is the most sensitive part, that most often the success of the whole process depends on, a concise analysis of the key methods and factors influencing price formation is presented at the end of the paper.

In the process of transformation of the socialist system, the need was imposed for the development of a market way of doing business following the example of the economies of market developed countries. In this context, the Republic of Srpska is pursuing an economic transition to enable the establishment of a marketorganized economy. Privatization of state capital in companies is an indispensable precondition for the implementation of this goal. This would enable the establishment of a market economy and an open and liquid capital market. To achieve this, the key task is to establish an efficient financial system that is the most important part of the overall economic system. This imposes the need for the presence of well-trained financial institutions to operate in the newly emerging market conditions. Therefore, in the Republic of Srpska, attention is paid to the transformation of already existing financial institutions and the formation and transformation of new ones, such as investment funds. The formation and transformation of investment funds is of great importance in supporting the market economy. Consequently, the research in this article is focused on the chronological presentation of the transformation of investment funds in the Republic of Srpska and their operations in order to see to what extent they have influenced or not the development of corporate management and capital markets.

The issue of market risks management in investment companies is being updated and gaining importance in recent years, due to frequent crises and shocks in the financial markets. The application of the normative and comparative method in work analyzes the exposure of investment companies business to market risks. The paper points out the importance of determining market risks, as well as the types of market risks to which investment companies are exposed, and the importance of introducing new solutions adopted in the European legislation. The application of the proposed solutions based on qualitative and quantitative measures should enable both investment companies surviving on the capital market and providing adequate legal protection to investors. Therefore, the paper emphasizes the need for identifying and early recognition of market risks in investment companies, proposing appropriate measures, assessments and models for managing market risks in the investment companies.

Author explains legal regulation of OTC financial derivative trading on the leading financial markets (USA and EU) as well as shows uniform regulations developed in international legal environment, and separately explains legal framework of the said question in positive Serbian law. Author elaborates main current legal issues related to financial derivatives transactions on the OTC market to which domestic participants are exposed during the operations in Serbian territory but also in cross-border operations. Finally, the author provides concrete proposals for further improvement of disputable legal issues by amending the regulatory framework in line with comparative legal regulations and regulations developed by the international community. Purpose of this article is to bring the attention of legal experts in Serbia to certain inefficient solutions in currently applicable legal regulations related to financial derivatives on the OTC Market, as well as to serve to legal practice as guidance for practical solving the disputable legal issues in particular transactions which have become frequent also for domestic participants on the capital market.

The paper discusses the prospects of the global capital market at the end of 2018, that is, ten years after the onset of the global financial crisis. Bearing in mind that the United States and China are the world's largest economies, with a combined share in the global gross domestic product of approximately 40%, the analysis is focused on these two major and systemically important economies. Also, the paper points to the most important macroeconomic problems that have accumulated in the observed ten-year period. The financial difficulties faced by the world's leading economies greatly limit the ability of governments to intervene and provide assistance in the event of new global financial shocks.

The capital market can be defined as an organized merger of companies with a shortage of long-term assets and companies that have a surplus of long-term assets and which wish to borrow the same while earning a profit. The subject of the research is the analysis of the capital market in Serbia with the aim of determining on the basis of relevant literature how it functions. The research was conducted based on the method of analysis. The results of the research indicate that although legislation has been passed, the capital market is not sufficiently developed. In order to enable the development of the capital market, both domestically and internationally, it is necessary to continuously adapt to the challenges and changes that prevail in the world economic trends.

The international movement of capital, and especially foreign direct investment, has become one of the initiators of globalization of world production and trade in recent decades. Liberalization of the market of ex socialist economies and privatization of state and social property was an additional stimulus to the growth of foreign investments. The entire concept of international lending has imposed a consensus on which transition countries (un) willingly agreed: foreign investment has become the main source of capital for structurally adjusting their economies to the new global economic system. Foreign direct investment exists when an investor from one country acquires property in another country in an amount not less than 10 percent with the intention to manage that property. SDIs take place between companies of highly developed countries, but also in the relations between economically developed and transition countries, i.e. underdeveloped ones. The main motive of multinational companies as investors are high profit rates, asset value increase, growth in competitiveness and the emergence of new markets. The light motive of the country of the importer of capital is the forced substitution of the lack of domestic accumulation, the increase in production and employment, and the consolidation of the balance of payments. Foreign investment entities are exposed to commercial as well as political risks. Out of non-commercial risks, the insurers are protected by diplomatic and international legal protection measures, which are mostly standardized through international practice. The Republic of Serbia has built a competitive national investment and legal framework for attracting foreign investments, which is in line with international standards. This is also confirmed by the 65th place on the Global Competitiveness Index of the World Economic Forum in 2018. Despite the fact that the Republic of Serbia has a unique legal system, it does not apply to the territory of the AP Kosovo and Metohija, which is contrary to the basic principles of international public law and law in general.

In the modern economies, capital markets can greatly contribute to the development of the national economy. Bearing in mind above mentioned, during the time the idea of improving the protection of the capital market participant's interests has been developed. Therefore, at the EU level in 2014 has been adopted Regulation and Directive which provides the obligation for member states to prescribe the criminal sanctions for capital market abuses. Nowadays, almost all national legislation provides protection of the capital market participants interests by criminal law. In some of them criminal sanctions have been provided by secondary criminal legislation. Such an approach exists in the Republic of Serbia and Italy. Before the accession to the European Union, the Republic of Serbia should harmonize its national legislation with Union acquis. Bearing in mind the similarity of access to capital markets protection by criminal law between Italian and Serbian legislation, perhaps some Italian solutions could be an example for further harmonization with EU standards. Therefore, the subject of analysis in this paper is the capital market protection by Italian criminal law and its compliance with the EU legislation in this area.

Considering the character, development and the current economic conditions of business operations in Republika Srpska (undeveloped capital market, inadequate legal regulations for the realization and collection of collaterals, the dominant participation of loan business operations in the overall banking), the greatest attention in controlling the banking sector is paid to the control of loan, liquidity and foreign exchange risks. This sector has recently recorded a decline in non-performing loans and a slight growth in profitability, as shown by negative correlation coefficients a few years ago. The aim of this paper is to focus attention on the NPLs and the possibility of their growth, as well as the discovery of new models for controlling them. In this paper, the method of analysis shows indicators of banking sector's profitability, total loans and non-performing loans from the onset of the crisis to date. Hypothesis set in this paper is that the participation of non-performing loans in the banking sector of Republika Srpska is too great and threatens loan activities and successful business operation. After a bad experience with two banks and serious problems that depositors have been facing, as they have not received their money and it is questionable whether they will ever get it, it is necessary to more thoroughly monitor business operations of each bank as well as the overall banking sector in order to react in time to prevent major problems.

Capitalisation is one of the key economic and social phenomena. It enables economic and social progress. Capital can only arise from goods in certain social conditions, which are legally regulated through the institutes of ownership and private property, and where it interacts with labour, creating a new value. Capital flow requires a special socio-economic entity, shaped into the capital market. With capitalisation and capital flows, the network structure of the capital markets is established following the network structure of the society and the wider market. Its members are gathered around a specific hub - a stock exchange or a multilateral trading facility. The very nature of the network structure and the flow of information through it have some inherent defects, which require the special regulation of capital markets.

In order to increase chances for bond emission success, and to achieve lower emission interest rates, bonds collateral is used. Established collateral can be personal or given on property. Personal type of collateral can be given as personal, bank or state guarantee as well as claim insurance, while property collateral could be given in form of pledge or mortgage. This paper is concerning practical issues that are specific for establishing each type of bond collateral, preconditions that must be fulfilled in order to establish certain types of collateral and well as question, weather is it possible to establish bond collateralization in Republic of Serbia.

Dept securitisation is a procedure of converting non liquid bank assets into liquid by securities placement at capital market. Subject of this paper is on balance securitisation and question is it possible to conduct emission of bonds covered by pledge on bank claims, since it is possible to issue corporate bonds. Emission of this kind of bonds would enable issuer to collect cheep capital, while he would emit high quality dept bonds with low interest rate. The paper indicates the problems which follow this kind of emission and gives answer to the question which is the preconditions for it to be enabled in our legal system.

Development of financial reporting standards has been almost entirely nationally oriented for a long period. Consequently, substantial discrepancies among the standards and practices of financial reporting between the countries have appeared, and cause serious problems to many participants of the international business, especially to multinational companies and international investors. The globalization of business activities, capital markets in particular, resulted in the need for the development of a unique set of high-quality global financial reporting standards. The global financial reporting standards, the development of which is underway, should not be observed as a sole accounting response to the capital market globalization. They are one of the crucial factors of further globalization and integration of capital markets, thereby global economic development as well, because they serve as a means for satisfaction of information needs of numerous participants on the capital markets around the globe. International Financial Reporting Standards (IFRS) have potential to become the universal language of financial reporting. They are widely spread in the world, but there is much room for their further dissemination.

Management of institutional investors implies market economy as well as the existence of transparent financial market and its segments (money market, capital market, foreign money market, derivative securities market etc). The financial market and its segments make effective mobilization of even the lowest amounts of temporarily free funds of the population, economy and the state possible for their involvement i.e. allocation into financial flows of the market economy. At the same time, financial market helps in quickly and effectively transforming assets into money, as well as the flow of all kinds of funds and their further investment. This contributes to the development of financial market, more effective management of business entities, along with faster and more stable development of the economy. In the following text, the types and functions of institutional investors on the financial market will be highlighted, as well as their contribution to the development of the financial markets.

Dept securitisation is a procedure of converting non liquid bank assets into liquid by securities placement at capital market. Subject of this paper is on balance securitisation and question is it possible to conduct emission of bonds covered by pledge on bank claims, since it is possible to issue corporate bonds. Emission of this kind of bonds would enable issuer to collect cheep capital, while he would emit high quality dept bonds with low interest rate. The paper indicates the problems which follow this kind of emission and gives answer to the question which is the preconditions for it to be enabled in our legal system. [ABSTRACT FROM AUTHOR]

Financial reporting process has long outgrown the framework of accounting functions of the rampany. It is an important management tool that serves not only accountability, but also communicating with the investment community in order to create financial reputation of the company. Financial reporting contributes to the efficiency of capital markets as a precondition for development of the entire economy. Hence, in the contemporary market economy financial reporting by management can not be seen solely as normative the imposed obligations. Financial reporting policy is a set of tools aimed at the target format of the financial statements. In other words, the content and form of financial statements, adjusted to the defined goals of a company. It is important however to note that the entire process is carried out in accordance with current legislation, generally accepted accounting principles and IFRS. Otherwise, you would not be able to talk about the legal action, but a counterfeit financial reporting. The aim of this paper is to highlight the achievements of the policy of financial reporting in the creation, management and maintenance of value for business owners. Specifically, strategies, objectives and policies of the company verifying their right to have a market. Through the activities of the commercial market enterprise creates value. However, testing is done on the value of the capital market. The importance of financial reporting is reflected in both these markets. [ABSTRACT FROM AUTHOR]

The aim of this paper is to analyze the IPO underpricing phenomenon. After reviewing the basic assumptions of the IPO underpricing theoretical models, the paper explores the most important factors that determine the level of underpricing, such as macroeconomic conditions and characteristics of both the issuing company and the initial public offering. These considerations help analyze the IPO underpricing phenomenon and the problem of price discovery when Serbian companies go public. The features of domestic corporate environment, such as underdeveloped capital market, information asymmetry, lack of corporate education, substandard corporate governance and investor protection, and high level of systemic risk imply a high risk of going public, high probability of IPO underpricing, and, consequently, a lack of interest for IPO realization. [ABSTRACT FROM AUTHOR]

The author gives a comprehensive analysis of the obligations of public companies regarding the provision of periodical (ad hoc) information to the public on the capital market. Ad hoc disclosure is to achieve a number of aims. It is one of the devices to secure the market's functional abilities. By means of regularly fulfilling this obligation, the market is provided with all the relevant information necessary to form adequate prices of market materials - i.e. securities and other financial instruments (the function of market protection). Investors are thus being able to aptly respond to modified circumstances and deliver investment decisions whether to buy or sell market materials the price of which are being changed (the function of investor protection). Due to the fact that the duty of ad hoc disclosure encompasses the obligation to reveal insider information directly affecting the emitter, ad hoc disclosure serves as a preventive measure, i.e. as a protection against illicit trade with insider information (the function of prevention against the abuse of insider information). [ABSTRACT FROM AUTHOR]

Th e key issue being of interest to all investors, both big and small ones, is how to make a realistic assessment of the value of some company's shares and which parameters should be taken into account when making a decision whether to sell or buy certain shares. However, there is no reliable way of determining accurately the value of a share. Nevertheless, prior to investing money in any company, the investors can try, by applying some methods, to mathematically calculate whether the share concerned is undervalued or overvalued. [ABSTRACT FROM AUTHOR]

The accounting standards and legal regulations require companies to show property to true and objective manner. Various regulations have been ordered arrangement of relations in public enterprises, in order to materially and formally correct representation of their financial accounting statements. Management of public companies to avoid mass introduction of such property in the property fund company, because it creates an obligation revaluation and depreciation calculation mentioned property, which has the effect of increasing costs, reducing net results, which mainly result in negative financial result. On the preparation and publication of annual financial reports directly affects a number of requirements and those relating to accounting assessment, and requirements for disclosure, i.e. disclosure in the prescribed form. The main objective of these requirements is to create conditions for fair and honest financial reporting of many investors. To understand the true significance of the financial audit function is necessary to bear in mind that is always present a real possibility of a mismatch of interests of management companies which have a decisive impact on the preparation of annual financial reports with the interests of investors whose assets, thus, may be exposed to loss. If we take into consideration the place and role of investors in the overall national economy, it is evident that the importance of financial auditing functions to ensure confidence in the mechanism of capital markets and the state as regulator and controller of the mechanism. [ABSTRACT FROM AUTHOR]

Public companies in the capacity of capital market participants have the obligation to inform the public on their legal and financial status, their general business operations, as well as on the issuance of securities and other financial instruments. Such obligations may be divided into two groups: The first group consists of regular periodical public disclosures, such as the publication of financial reports (annual, semi-annual and quarterly), and the management's reports on the public company's business operations. The second group comprises the obligation of occasional (ad hoc) public disclosure. The thesis analyses the obligation of public companies to inform the public in course of their regular reporting. The new Capital Market Law based on two EU Directives (the Transparency Directive and the Directive on Public Disclosure of Inside Information and the Definition of Market Manipulation) regulates such obligation of public companies in substantially more detail than the prior Law on the Market of Securities and Other Financial Instruments (hereinafter: ZTHV). Due to the above the ZTHV's provisions are compared to the new solutions within the domain of regular periodical disclosure of the Capital Market Law. [ABSTRACT FROM AUTHOR]

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Copyright of Singidunum Scientific Review / Singidunum Revija is the property of Singidunum University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In this paper, emphasis is placed on bonds that during 2009 and 2010 became an absolute hit on the Banja Luka Stock Exchange. These are types of bonds whose issuer is the Republic of Srpska, designated as bonds of war damage and bonds for the payment of old foreign currency savings. The paper elaborates the reasons for issuing the bonds, due to their influence on the capital market development in the Republic of Srpska. [ABSTRACT FROM AUTHOR]

Creating the optimal portfolio of securities on modern financial markets is leading in the modern theory and practice of investment in securities. The paper analyzes the extent and value of trading securities on the Belgrade Stock Exchange during the period from 31 October 2005 to 31 October 2010, as well as movement of the corresponding stock index during that period. Furthermore, the paper elaborates theoretical and empirical analysis of quantitative choice of the investor's optimal portfolio of securities with security preference in case of the Republika Srpska capital markets. Based on the analysis of selection of the investor's optimal portfolio of securities with security preference are Roy's model, Kataoka's and Telser's model. The bases for the analysis of selection of the investor's optimal portfolio of securities with security preference are elaborated by means of the mathematical analysis of the Roy's model, Kataoka's model and Telser's model of capital market of the Republika Srpska. Interpretation of the results can serve as a basis for professional and scientific discussion on the investor's optimal portfolio of securities with security preference. [ABSTRACT FROM AUTHOR]

This paper aims to point to one of the main reasons for poor performance of individual and institutional investors in the investment process. The first step that is proposed when investing is defining investment policy (Investment Policy Statement - IPS). Most individual and institutional investors in BH have no clearly defined investment policy. By respecting simple rules that the investment process involves the beginner's mistakes could have been avoided to a great extent and financial losses in investors portfolios could have been reduced as well. Practicing concept of assets allocation, mutual funds would preserve the value of assets under management in the amount of BAM 213 million for its 417,000 shareholders. Assets allocation involves making decisions about the choice between different classes of assets in the portfolio. This concept explains between 80% and 90% of portfolio performance measured by return on investment. Passivity of investment funds has led to illiquidity of the market, preventing the restructuring of the issuers at the Banja Luka Stock Exchange, the absence of support for the process of incorporation and slowing down the process of creating new financial instruments in domestic market. With adequate assets allocation investors manage and control the portfolio risk, increase yield, introduce discipline in the investment process and become "intelligent investors." [ABSTRACT FROM AUTHOR]

Securities' allotment is a process by which the number of relevant securities to be received by investors who have previously subscribed or applied for them, is determined. Allotment process becomes of relevance when investors subscribe or apply for a greater number of securities than originally offered. Allotment process is related to two crutial questions. Firstly, should an emitent or investment services firm have entire freedom related to allotment method chosing? Secondly, are they obliged to inform the investors about the chosen allotment method, and if yes, with how much detail? The article gives answers to these questions. Furthermore, the paper comprises the analysis of standards, which should be respected during allotment and overallotment procedure, as well as accomplishing of green shoe option. The last title contains proposals of new solutions for Serbian Company and Capital Market Law concerning this topic. [ABSTRACT FROM AUTHOR]