In September, the Montenegro Stock Exchange reported a significant year-on-year increase in turnover, which more than doubled despite a notable decline in market capitalisation and persistent low liquidity. The total turnover for the month reached approximately €1.29 million, reflecting a rise of 104.46% compared to September 2022.
The number of transactions also saw growth, increasing to 147 from 101 in the same month last year. A considerable portion of this trading activity was concentrated in Jugopetrol, which alone accounted for around €741,570, representing over half of the total monthly turnover.
During September, the MNSE10 index experienced an uptick of 3.78%, while the broader MONEX index rose by 4.65%. However, these gains did not lead to a corresponding increase in overall market value.
The equity capitalisation on the regulated market fell by 17.52% year on year, totaling around €1.37 billion. Additionally, the average daily turnover remained low at about €58,760, indicating limited liquidity that could deter larger institutional investors.
The data suggests that the heightened activity is primarily linked to a select group of listed companies rather than indicating a widespread recovery in Montenegro’s equity market. This distinction is crucial as the country aims to enhance its financial sector and reduce reliance on bank lending.
Currently, Montenegrin companies predominantly depend on commercial banks, retained earnings, and foreign investments for their financing needs. The domestic stock exchange plays a minimal role in facilitating growth capital. To foster greater market liquidity, there is a need for a broader investor base, an increase in listed companies, and a more substantial pipeline of investable securities.
The alignment of Montenegro’s financial markets with EU standards could potentially bolster this process by enhancing governance, transparency, and investor protection. While the surge in turnover for September is encouraging, the simultaneous drop in market capitalisation underscores that Montenegro’s capital market remains limited and concentrated rather than experiencing a broad-based recovery.
