9th February 2022, Skopje – More possibilities for financing companies’ projects, increased offer of investment instruments, as well as attracting foreign investors, are the key goals of the Financial Market Development Strategy, adopted by the Government of the Republic of North Macedonia upon proposal by the Ministry of Finance.
Key areas covered in the Capital Market Development Strategy are increased offer of equity securities by stimulating initial public offering and full or partial privatization through the stock exchange in order to develop the primary stock market, increased offer of debt securities by issuing various types of bonds in order to boost investments and change the ownership structure, for the purpose of developing the secondary debt securities market and increasing the use of the potential of the institutional investors to the end of developing the capital market, changing the architecture of the non-banking financial regulation and organized (institutional) approach to improving the financial education in the field of capital market.
Strategy’s goal is to accelerate the pace of operations on the capital market as a whole, thus attaining the development level of EU average. Level of market capitalization, liquidity of capital markets, structure of sources of financing companies’ projects, structure of investment portfolios at individual investors and level of financial education are thereby set as indicators for achieving the Strategy goals.
Role of financial markets in every country is crucial for the economic growth. Investments are focal point of economic policies, hence capital market development is a significant long-term economic factor influencing the scope of both production and employment.
In addition to the measures aimed at expanding the offer of instruments on the capital markets, the Strategy also envisages measures to increase the securities demand, to be achieved by enhancing the attractiveness of the financial instruments, easing the regulatory limitations and raising the awareness and advancing the financial education of the participants.
Capital market is a place where companies are brought opportunities to mobilize more flexible sources of financing. Besides the largely present traditional financing through banking credits, the companies are provided alternatives to be beneficial especially for those in their early stage of development and the emerging companies by issuing securities, as well as establishing venture capital funds. Moreover, each idea to be successfully financed and developed through the so-called venture capital funds or the crowdfunding platforms can be later supported through the stock market as well.
As for the households, the capital market is an opportunity for long-term investments and generating higher returns, which are to be kept stable through diversification. The Strategy puts particular focus on increasing the share of households and domestic and foreign institutional investors.
Defining the manner of presenting the country’s investment opportunities, encouraging companies to take part in regional investment conferences, as well as increasing the visibility and availability of domestic securities for the foreign investors, will provide for attracting foreign investors to the end of injecting fresh foreign capital, thus intensifying the economic growth rates.
Financial education plays an important role in the whole process, bringing the new opportunities closer to the potential users and providing for such opportunities to be used by as many investors as possible.
To the end of increased efficiency of the regulatory bodies and a comprehensive approach to regulation, the Strategy envisages merging the financial market regulators, to be responsible for all processes on the financial markets. Financial regulation in North Macedonia today is set in a way that many financial regulatory bodies regulate certain specific segment of the financial market.
The Strategy has been prepared through an inclusive process of exchanging ideas and consultations within the Capital Market Development Council managed by the Ministry of Finance of North Macedonia.
Key objectives of the Strategy are increased contribution of the securities market to country’s GDP, strengthening and maintaining financial system’s stability and security, supporting both the development and the implementation of digital solutions to the end of increasing the availability of instruments on the capital market, improving the efficiency of the processes taking place therein, etc.