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MACEDONIAN STOCK EXCHANGE OPTIMISTIC FOR NEW FINANCIAL

INSTRUMENTS

DAILY STOCK EXCHANGE REVIEW OF PRINT MEDIA EVENTS 3Date 14.04.2008 number 18 berzNIK

Macedonian Stock Exchange optimistic for new financial instruments

The Stock Exchange has kept on its feet after the firststress tests; the correction is the best that can happen tothe capital market; the downward trend will come to an end,it will stabilize and turn into a bull market, are the optimisticforecasts of the stock exchange experts, analysts and bro-kers that took part in the ninth annual Macedonian StockExchange Conference in Ohrid.

-The Stock Exchange is taking its place in the financialand social life and is constantly in the focus of the publicattention. That makes positive pressure on the companiesand on the other participants on the market during theeveryday business decision-making processes. The fund

industry has finally start-ed functioning, which willhave stabilizing effect onthe weakened price oscil-lations on one hand, andon the other hand, it willserve as a catalyst for pri-mary market develop-ment, which is the miss-ing link. The new issuesof securities by the me-ans of public offering andnew stock exchange list-ing seam more and morecertain. The regional po-sitive experience on thisfield won`t avoid the Re-public of Macedonia.

The investors arehungry for new financialinstruments on the Mace-donian Stock Exchange,says the head of the Ma-cedonian Stock Exchan-ge, Ivan Steriev.

-The world experi-ence shows the current

financial performances of the companies and their futureperspectives are crucial factors on middle and long terms.The other occurrences have no direct influence on thecompanies` activities, but have influence on the durationdynamics of the price amplitudes on the market, pointedout Steriev. In this context, he reiterates that according tothe 2007 statements of success, the aggregated profit ofthe listed companies has been increased for more than120% and that their financial indicators are engaged inmainly unchanged relations with the companies with thesame business activities that trade on the regional stockexchange markets. According to Steriev, although the datafrom March show net outflow of foreign portfolio investorsi.e. 50% of sales opposite to 20% of buying, the crucialinformation is that the foreigners have entered in the capi-tal structure of all listed companies with 30, 9% comparedwith the participation of 16, 3% at the end of the openingquarter of 2006 and 25, 3% in 2007. Furthermore, the mar-ket still has lack of portfolio investors coming from outsidethe territory of the former Yugoslav republics. Preciselythese two factors, according to Steriev, can mean potential,dynamics on the market in the following period, especiallydue to the fact that we are going through a phase of mar-ket correction. The stock exchange events are more con-nected with the events on the regional and global capitalmarkets.

- We are no longer isolated and lethargic, which inprinciple is new and significant feature and an announce-ment for future imported, external market shocks promptedby the world and regional turbulences. However, the posi-tive effects of the increased integration of our market with

the foreign ones will be surely felt in near future.Steriev also pointed out that the situation on the stock

exchange has no chances to return to the positions fromthree or four years ago. The level of the average turnoverof around 50 million denars, although significantly smallerthat last year`s average is by far higher than the averagelevel before last year`s spring stock exchange boom. Theanalysis of the euphoric 2007 was precisely the subject onthe panel discussion-Stock Exchange 2008 versus 2007:Who Will Win?

A debate on which the Director of Euro Broker, KrsteSajnoski, put forward his view there has been conditionswhen the logic of profit will exceed the already establishedpractice, the securities purchase to be reduced to a lot-tery…

In 2008, a significant factor for the investors will beinvesting in extremely profitable companies, which wasn`tthe case to date.

This means the companies` management will be eval-uated according to the value of the shares of the compa-nies they are running with, and out of these reasons, theywill pay much more attention on profit increase.

Analyst Sam Vaknin believes the correction is the bestthing that can happen to the Macedonian Stock Exchange,since all of the "hot" money and speculative deals thatresulted from the weak economy has been sorted out. Hedescribes the high inflation, the enormous trade deficit andthe absence of foreign investments are due to the badGovernment policy. His forecasts about the stock exchan-ge index aren`t optimistic, but, according to him, it doesn`tmean they are black. Most of the companies from the stockexchange index are overrated. Nevertheless, the marketwill break up with the downward trend, it will stabilize itself,says Vaknin.

Vaknin`s position was disputed by Snezana K. Milose-ska from the Ministry of Finance, who disagreed with hisclaims for bad economic policy , saying that if we make ahindsight of what was happening in the past and what wasexpected, generally speaking, we have progress on the ca-pital market in the Republic of Macedonia, especially in thefield of non-banking capital… In this context, the active pol-icy conducted by the Government in the past period hasmade major contribution…

All efforts made for the purpose of resource mobiliza-tion, improved regulative and attraction of as many as pos-sible investors. According to Miloseska, the stock ex-change had played extremely significant role and showssolid performances, although it had both positive and nega-tive cycles… She says there is room for market develop-ment and introduction of new financial instruments andannouncements.

- The market can soon expect increased offer by themunicipality securities that are being intensively workedon. We all have a common goal, that is to see a solid stockexchange and interest for listing as many as possible com-panies.

In this context, the President of Beton`s Board of Di-rectors, Mikjo Naskovski, says: If we want to liven up theeconomy we must give a challenge to the investors, whoare keeping their money in foreign banks, to invest theirmoney here, on the Macedonian Stock Exchange. Theyare the driving force that the home companies should relyon, while the foreign investors are only additional segmentthat is to lively up the stock exchange.

Until the next MondayMakedonka Baldazarska

BerzNIK editor-in-chiefe-mail: [email protected]

After the historical plunging of the MacedonianStock Exchange Index by 8, 4% in the opening weekof April i.e. on the day when instead of being extend-ed with invitation, we received veto for our NATOaccession, or in other words, after the psychologicalbreakdown grounded on panic, fear and euphoria,the foreign stock exchange experts also convey opti-mism for market stabilization in 2008.

There is potential i.e. the real values of the sha-res and the profit get to see the light of the day-theseare the expectations and the forecasts coming fromthe discussion at this year`s stock exchange press-conference. This second-in-row international confer-ence that gathers more than 250 stock exchangeexperts, analysts and brokers from the country andabroad in one place occurred in an extremely sensi-tive period on the Stock Exchange.

The market pulse and turbulences are largelydue to the psychological moment prompted by thetensions on the political scene before and afterKosovo, before and after NATO and now in the eveof the early elections…

4 DAILY STOCK EXCHANGE REVIEW OF PRINT MEDIA EVENTSberzNIK number 18 Date 14.04.2008

IT EXPERTS COMPLAINED TO THE GOVERNMENT

IT EXPERTS COMPLAINED TO THE GOVERNMENT

Macedonian ICT companies and the Governmentrush forward in implementing new technologiesand services in the IT sector, banks are the onlyobstructer

At the moment the information-communica-tion technologies industry is one of the quickestgrowing in Macedonia and it keeps up with theworld IT industries, but there are still certainproblems which the Macedonian companiesand the Government have to find mutual soluti-ons for. This is how some of the conclusionslooked like on the business meeting of repre-sentatives of the IT sector with Minister Ivo Iva-novski, in charge of IT science. At the initiativeof the Chamber for information-communication

technologies within the Union of Chambers ofCommerce of Macedonia, reviewed were manyissues and problems our companies of this sec-tor face with, and which ask the Government forpossible solutions and suggestions for improv-ing this state of stagnation in the ICT industrydevelopment in Macedonia.

- Liberalization domains registration,development of electronic trade, the broadbandinternet access, forming National council forICT, as well as forming Secretariat for IT-tech-nology, are the basic issues the IT companiesface with. The Government has already startedsome activities and projects on these matters,but according to the ICT chamber's president,Vanco Ordanoski, it's obvious that greaterefforts and stronger mutual endeavors are nec-essary. In the talks the strongest accent wasput on the development of electronic trade inMacedonia, for which stagnation businessmenput the blame at the banks and their inefficien-cy in implementing the reforms and the prepa-rations for application of the new Law on Elec-tronic Trade. Although the Law was passedeven five months ago, Macedonian banks ha-ven't sent any response yet and this is big obs-tacle for the development of this segment of theICT industry. The reason for these obstructionsis the disagreements among the banks them-selves, as well as the unfavorable offers to the

companies:- It's an electronic trade, and in the

trade what's most important is the profit. Bankswant too much of a share from the earning,practically they come something as our part-ners, because the commissions they take aretoo big, and there are also problems with open-ing accounts, which are of special type for elec-tronic trade, in the processing of e-credit cardsand transactions- Ordanoski explained.

For this purpose, he announced meetingwith representatives of the National Bank, thin-ning that this bank can have influence on thebanks by informing them more specifically onthe advantages the electronic trade can bringthem. According to him, most probably the

banks are not even aware how big is the inter-est for the so called e-stores, nor that they canonly profit this way.

Minister Ivanovski underlined that it hasn'thappened before the private sector to staybehind with its preparations after the adoptionof certain law.

- Everywhere in the western countries thebanks are the moving force of economy, whichunfortunately is not the case with Macedonia.Here, except for one bank, no other has anoption for electronic transaction via internet.

The banks cannot agree on what percent theywill operate with, what are the services theyoffer to the citizens and it is very unclear whythey do this. Even since the preparation of theLaw on Electronic Trade five months ago, onthe meetings with the Chamber the banks weretold that this Government will invest more fundsfor development of the electronic trade in 2008,but there are still no positive responses fromthe banks in Macedonia- Ivanovski said.

In relation to monopolizing the IT productson the Macedonian market, Ordanoski saysthat the situation is not that concerning and thatthings in this field are moving in positive direc-tion: - The situation that existed up until one-twoyears ago has drastically changed. Certaincompetition was created which can mostly befelt in the mobile telephony, and as ICT compa-nies we feel it in the internet communications aswell. Now the WiMAX technology comes forwhich concessions were granted, so I can saywith pleasure that many things have beenchanged for the better- Ordanoski said.

The issue on the domains registration forthe websites raised an interest among the pres-ent on the discussion. The Government has ta-ken activities in this direction too, more specifi-cally measures for transformation of Maknetnetwork, under which the users names for theweb-sites go, so that they can be given moreeasily to all interested in opening a website.

Good news for Macedonian ICT industry isthe newly-opened Secretariat for IT technology,

which is expected to start operating soon andwhich announces big plans for development ofthe electronic trade of small and middle-sizedenterprises, and it is expected in near futureNational council for information-communicationtechnologies to be formed, which would be veryimportant being the only communicationbetween ICT chamber and the Government.The Secretariat for IT science however, has apurpose to help the companies promote out ofour country's borders and take their own placeon the foreign market.

K.S


2. TOP NEWS - IMPORTANCE BY NUMBER OF PUBLICATIONS1. THE GOVERNMENT CANNOT RELEASE YOU FROM INFLATION (****)2. NEW GROUP OF INVESTORS OF SMALL HYDROELECTRIC POWER PLANTS (***)

07.04.2008 MONDAY1. SHORT REVIEW OF EVENTS

DNEVNIKp.4 THE GOVERNMENT CANNOT RELEASE YOU

FROM INFLATIONp.7 MACEDONIA AMONG THE TOP TEN COUN-

TRIES IN THE WORLD ACCORDING TO THERISE IN PRICES

p.7 THERE IS AN INTEREST FOR CREDIT FORSELF- EMPLOYMENT

p.7 AGRICULTURAL SOWN FIELD MAY BE INSUREDIN ALL INSURANCE COMPANIES

UTRINSKI VESNIKp.8 THE PIVOTAL COMPANIES OF THE RADOVISH

ECONOMY ON THEIR KNEESp.8 SWED MILK EDUCATES FARMERS TO WORK

BY EUROPEAN MANNERS p.8 LUKOIL OPENED TWO GAS STATIONS IN SKOP-

JE AND IN STIPp.9 PORSCHE AND VOLKSWAGEN ARE INCREAS-

ING THEIR EMPIRESp.9 MILKA FORCAN STILL REMAINS IN DELTA

HOLDINGp.9 LAST YEAR INCOME OF 4.2 MILLION EUROS p.9 ESTABLISHED THE INVESTORS` GROUP OF

SMALL HYDRO PLANTS VECER

p.6 TRADE EXCHANGE GOING UPp.6 THE VELES POPULATION WILL PROTECT

THEMSELVES WITH LIVE SHIELDp.6 NEW GROUP OF INVESTORS OF SMALL

HYDROELECTRIC POWER PLANTS p.7 OPTIMISM BACK ON THE STOCK EXCHANGEp.7 RUSSIANS AND UKRAINIANS HAVE THROWN

THEIR EYES ON THE OHRID RIVERSIDEp.7 TWO THOUSAND HECTARES OF SUNFLOWER p.7 THE OIL PRICE RISES AGAIN

VREMEp.1 DO NOT BE AFRAID OF DEVALUATION

VESTp.2 THE 45 MILLION EUROS INTENDED FOR AGRI-

CULTURISTS` SUBVENTIONS TO REMAINUNUTILIZED

p.3 TRADE DEFICIT INCREASED BY 73 PERCENTp.6 PRO PLAYS DOWN THE SALE OF ALUMINA

NOVA MAKEDONIJAp.1 THE INVESTOR`S COMMUNITY RECOVERED

THE SHOCK IN JUST ONE DAYp.5 THE PRICE OF THE PETROLEUM IS INCREAS-

ING p.5 GORDON BROWN WARNS ON WORLD ECO-

NOMIC CRISESp.5 NEW GROUP OF INVESTORS OF SMALL

HYDROELECTRIC PLANTSp.5 MICROSOFT WITH AN ULTIMATUM TO YAHOO

SPICp.6 FROM TOMORROW NEW DISCONNECTIONS

OF THE ELECTRICITYp.6 THERE WILL BE STRAGGLE FOR CONCES-

SIONS OF THE MACEDONIAN AIRPORTS

The optimism returns on the Stock Exchange, isthe title of the stock exchange analysis of today`s issueof Vecer. - After many turbulences, the capital marketrounded up the opening trade week of April with stabili-zed stock exchange index, MBI-10, composed of thetop ten most solvent companies. After the psychologi-cal pressure last Thursday and the failure of our coun-try to access NATO, MBI-10 suffered record-breakingdaily fall of 8, 4 percent. However, the stock exchangehad made a fast recovery and the following day (Fri-day) the trade went out of the red and the index wentup 1, 66%. The index appreciation was due to the in-crease of the price of the shares of the largest Mace-donian bank-Komercijalna Banka by around 4.85%, fol-lowed by Teteks-Tetovo by 4.21% and Makpetrol byaround three percent. The overall stock exchangeweekly turnover reached around 4, 9 million euros.

This newspaper also carries the story that the oilon the world markets goes up in price again. In theNew York Stock Exchange, a barrel crude oil reached$104, 93 going up by $1, 10. On the Asian markets onthe other hand, the crude oil had hit the price of %105,93 a barrel while the European Brent had reached$103, 4 a barrel on London Stock Exchange. The oilprice is forecasted to continue going up in price due tothe weakened American economy.

Precisely the oil price increase on the world stockexchange markets is one of the reasons why JosefBreda, university professor from USA, in the interviewfor Dnevnik, says that the Government cannot save usfrom inflation. Should the prices of the imported prod-ucts go up on the international market and the domes-tic prices maintain their level, according to the currentexchange rate, the denar will remain depreciated inrespect with the foreign currencies and that is the real-ity, states Breda, Advisor of the Minister of Finance.

The Macedonian economy is heading towardsgood direction and the government policy should setthe course towards war on illegal trade, believes JosefBreda, professor at the state university in Arizona,USA, and advisor of Minister of Finance Trajko Slave-ski. The occasion of his visit is the current talks withthe IMF mission. As far as the inflation is concerned,Breda shares the opinion of Slaveski that the inflationis imported and the Government couldn`t do much. Thenon-extended membership invitation on the NATOSummit in Bucharest last week won`t affect the Mace-donian economy, claims Breda. - I do not believe itwould be a significant impact for the economy or nega-tive effect on the foreign investments. The foreign in-vestors are well aware why Macedonia wasn`t extend-ed with invitation in Bucharest. This decision wasn`t be-cause Macedonia failed to do something.

Dnevnik informs that Macedonia is among the co-untries with most steeping real estate prices in theworld. The prices of the housing premises last yearwent up by 13, 8% in average, which puts Macedoniaamong the top ten countries in the world by the price in-creases of the housing premises. The average price ofa square meter in this country is 745 euros. By price in-crease, we are holding the ninth place in the world afterBulgaria, Singapore, Russia, Poland, Hong Kong, Ice-land, Canada and Croatia.

According to the data from the British consultingfirm Knight Frank, last year the real estate prices hadthe biggest increase in Bulgaria, by 33, 7%. The ex-perts on the Macedonian real estate market locate thereasons for the price increase in the increased con-struction expenses and the announcement for NATOaccession.

Vest carries the story that according to the StateStatistical Office, Macedonia suffered a external tradedeficit of 414, 8 million dollars in the opening twomonths of 2008. This is up by 73, 2% in relation withthe opening two month in 2007 when the negative bal-ance was 236, 9 million dollars. The overall trade volu-me of Macedonia for the opening two months of 2008has been increased by 42, 2 percent in relation with thesame period last year.

Utrisnki informs that a new Group of Investors inSmall Hydro Power Plants (MHEC) was formed in theEconomic Chamber of Macedonia last Friday. BorkoAndreev, director of Mali Hidroeletrkani was electedchairmen and Zoran Kondratenko from Dufenergy andJandre Zdraveski from Metalec- Prilep for his deputies.The idea was to form a new group that will functionwithin the Macedonian Energy Association (MEA) andthe companies the were allocated with locations forconstruction of small hydro electric power plants on thefirst tender to organize themselves in this way. The se-cond tender is still on, and the Government has plansto announce several others tenders so that at the endto be offered 400 locations for locations for constructi-on of small hydro electric power plants throughout thecountry.

The newspaper also informs that about 50 farmersfrom Macedonia who are to pay five-day visit to Swe-den for the purpose education and adopting the stan-dards of the cattle breeding in that country. The finaltarget of this action, which is organized in our countryfor the first time, is to stimulate the enforcement of theEuropean standards for milk of the Macedonian farms.The visit is organized by the Swedish Federation ofFarmers in cooperation with S-Farm and Swedmilk Ma-cedonia.

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STOCK EXCHANGE REVIEW OF EVENTS IN THEPRINT MEDIA berzNIK

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STOCK EXCHANGE REVIEW OF EVENTS IN THEPRINT MEDIA berzNIKNumber: 18Date: 14.04.2008

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FRONT PAGE PHOTO:CRISTAL BELL AWARD WINNER

Photo:Robert Spasovski

Editorial staff of berzNIKInternet distributive system:www.interNIK.com.mkEditor: Makedonka BaldazarskaJournalist: Vaska Mickoska, Kiro SimonovskiDTP: Tatijana TrpkovskaEditorial staff:News Evaluator: Anita Bashoska, R. Tasovska[operators]:Mare Lazarevska, Arslan Skoro, Zoran Stamatovski,Martin Arsovski, Gorge Redzik, Toni Arsovski i Darko Tripunovski [translators]: translator's manager Senka Mihajlovska, AngelinaFilipovska, Slobodan Trajkovski, Aleksandar Stamenkovski, AnetaMenoska, Filip Koviloski, Darko IvanovskiFotoreporter: Robert Spasovski

Marketing, distribucija i proda`ba: INTERNACIONAL NIK AD - Skopje

I M P R E S S U M

C O N T E N T S

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 3

IT EXPERTS COMPLAINED TO THEGOVERNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

berzNIK, MONDAY, TUESDAY, WEDNESDAY. . . . 5-7

BASIC METALS MANUFACTURING - SUPPORTING PILLAR OF THEMACEDONIAN ECONOMY. . . . . . . . . . . . . . . . 8 - 9

GORAN KOEVSKI, PROFESSOR ATTHE FACULTY OF LAW.. . . . . . . . . . . . . 10-11

IMF SAYS: ............................................12

AFTER THE STANDSTILL IN MAKSTIL`SFOUNDRY .............................................12

berzNIK, THURSDAY, FRIDAY, SATURDAY.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13-15

WEEKLY MAGAZINES...….. . . . . . . . . . . . . . . . . . .16

PAST WEEK IN THE TAKEN OF... ..............17

WEEKLY REVIEW OF THE MACEDONIANSTOCK EXCHANGE. . . . . . . . . . . . . . . . . 18-19


The country collected almost 1 billion eurosin taxes from citizens last year, Dnevnik informs.According to records from of the PublicRevenue Office, 2007 Budget marks income ofaround 60 billion denars (986 billion euros) fromtaxation. The inflow is 3.3% higher than project-ed, and 16.3% more than 2006. Officials in PROsay that there are increased incomes on thebase of all taxes. Largest increase regardingprojections marks personal income tax. Thereare 6.9% more incomes, and total inflowamounts 8.9 billion denars. VAT incomes areincreased 3.5%, and collection of profit taxmarks improvement of 3.7% and excises 0.5%.

Metal producers, biggest exporters indomestic economy, demand conditions for mar-ket economy, energy support and state supportin accordance to National Program forRestructuring of the Steel Industry. Theirdemands, conveyed by all papers, were pre-sented by representatives of Makstil, FeniIndustry and Silmak on yesterday meeting in theEconomic Chamber of the republic ofMacedonia. Considering the fact that last yearexport of metals reached almost 40% of the total

export of Macedonian economy, metal produc-ers point out on the price of electricity as themajor obstacle for more successful productionand export.

ELEM has no money to provide coal forthermal power plant in Bitola and Oslomej, com-pany`s announcement reads. The import wouldcause price increase for households, and theydecided not to pick the most favorable offer onthe announced tender. Financial results in 2007of domestic banks show that their profit approx-imates the level of 20 million euros. StopanskaBanka Skopje achieved record breaking profit of18.3 million euros, Komercijalna Banka closed2007 at 16.5 million euros profit, and thirdranked NLB Tutunska Banka with net-profit of10.7 million euros. Are these figures result oftheir maximum efficient operations, or high inter-ests and their monopoly position on financialmarket, Utrinski Vesnik asks.

Two more news from the banking sector,interesting for the papers. The first comes fromStopanska Banka Skopje, bank that extendedits services with credits for micro and small busi-nesses, which flexibility give control to the user

over payment operations. UNI Bank for its clients, owners of Visa

Classic credit cards provided debiting of cashwithout provision from bank`s ATMs.Promotional period lasts one month, startingyesterday until 7th of May.

The Government, after last year failure,sales Veles seated factory for railroad vehiclesKolska, some daily papers inform. The only fac-tory in the country for reparation of railwayengines and wagons is sold at 476,610 eurosand potential buyer of the factory would have toassume last year loss of 272,000 euros andobligation from 2007 of 1.11 million euros.Future owner should provide bank guarantee inamount of 10% of the total projected additionalinvestments in the offer.

World stock markets bring the news for yes-terday oil price increase and approximation to107 dollars per barrel, as a result of dollar`svalue decrease compared to competitive cur-rencies, but also negative reports on conditionsof American economy.

1. SHORT REVIEW OF EVENTS

2. TOP NEWS - IMPORTANCE BY NUMBER OF PUBLICATIONS1. THE IMPORT OF COAL IS CANCELED BECAUSE THE ELECTRICITY WILL

APPRECIATE (*****)

2. KOLSKA FROM VELES ON SALE (***)

08.04.2008 TUESDAY

DNEVNIKp.7 OKTA PAID THE MOSTp.7 ONE BILLION EURO COLLECTED FROM TAXES ONLYp.7 ELEM TERMINATES THE COAL IMPORTp.7 KOLSKA FROM VELES ON SALE p.8 MBI 08.04.2008p.8 IMF: ALL GOVERNMENTS WITH JOINT FORCES FOR A SALVA-

TION OF A GLOBAL CRISISp.8 YAHOO REJECTED MICROSOFTp.8 UNSETTLED BILLS TO DISCONNECT RTV`S TRANSMITTERS p.8 THE METALWORKERS REQUIRE THE STATE TO TAKE CARE

OF THEM

UTRINSKI VESNIK

p.9 BANKS WITH FANTASTIC PROFITSp.9 IT IS UNSURE UNTIL WHEN OHIS AND MACEDONIAN RADIO

BROADCASTING ARE GOING TO HAVE ELECTRICITYp.9 UNI BANK WILL NOT CHARGE CASH COMMISSION FROM ATM p.10 ELEM HAS DECIDED NOT TO IMPORT COAL- IT WOULD

CAUSE EXPENSIVE COSTS p.10 HP PRESENTS THE LATEST SOLUTIONS FOR THE BUSINESS

CLIENTSp.10 BANKS WITH FANTASTIC PROFITS p.10 KOLSKA FROM VELES ON SALES AGAINp.10 MBI 07.04.2008p.10 MAJOR CONSUMERS COMPLAIN ABOUT THE EXPENSIVE

ELECTRICITYp.10 MAKEDONSKI TELEKOMUNIKACII OFFERS NEW PACKAGES

IN SEPTEMBER

VECERp.6 THE FARMERS WILL RECEIVE SUBVENTIONSp.6 CREDITS FOR MICRO AND SMALL BUSINESSESp.7 METALS ARE PARTICIPATING WITH 40% FROM THE TOTAL

EXPORTp.7 ELEM TERMINATES THE TENDER FOR COAL IMPORTp.7 THE GOVERNMENT IS SELLING KOLSKA

VREMEp.5 OHIS AND MACEDONIAN BROADCASTING NEXTp.6 OIL PRICE GOES UP AGAIN p.6 EXPENSIVE POWER MAKES US UNCOMPETITIVE p.6 SHARES GOING UP

VESTp.7 THE IMPORT OF COAL IS CANCELED BECAUSE THE ELEC-

TRICITY WILL APPRECIATE

NOVA MAKEDONIJAp.5 BUCHIM WILL INVEST OVER 4 MILLION DOLLARS IN NEW

EQUIPMENTp.5 WITHDRAWING CASH WITHOUT COMMISSION p.5 CREDIT CRISIS EXPANSION ON OTHER MARKET DESTABI-

LIZES THE DOLLAR p.5 INVESTORS ARE CAREFUL, MBI-10 INCREASED BY 0.7 PER-

CENTp.5 THE PRICE OF THE PETROLEUM AMOUNTS 107 DOLLARS

PER BARREL


1. SHORT REVIEW OF EVENTS09.04.2008 WEDNESDAY

DNEVNIKp.1 IMF: GOVERNMENT TO TRIM ITS SAILSp.4 INTERNATIONAL CORPORATIONS ARE LOOKING FOR

MACEDONIAN PARTNERSp.7 TO STOP THE PRICES FROM GROWING THE GOVERNMENT

HAS TO TRIM ITS SAILSp.7 FOOD PRICE INCREASE CANNOT BE CONTROLLED

BIZNISp.1 WHY SOME SHARES LOSE, AND OTHER EARNp.1 THE WORLD TO ENTER THE BIGGEST CRISIS EVER?p.1 WITHOUT NATO - WEAK ECONOMYp.1 MERKEL TO MEET BRANKO AZESKI p.7 THE COUNTRYS DOORS ARE OPEN p.7 MACRO-ECONOMIC PRESSURES INCREASED p.9 IT`S GETTING WORSER AND WORSERp.9 THE DOMINO EFFECT WILL BE LEFT ASIDEp.13 INTENSIFIED COOPERATION ON CREATING REGIONAL

PRODUCTp.14 A TRADE VALUE OF 25.284.569, 81 DENARSp.14 MBI-10 DECREASED FOR 0, 30 PER CENTp.14 MBI 08.04.2008 p.15 THE STRATEGY OF INGRA IS DEVELOPMENT OF MAVROVOp.16 WHY SOME SHARES LOSE, AND OTHER EARNp.17 DINAR CREDITS STILL TOO EXPENSIVEp.17 CASH WITHDRAWAL WITH VISA CLASSIC FROM THE ATM'S

WITHOUT COMMISSION UTRINSKI VESNIK

p.1 IMF RECOMMENDS WAGES TO REMAIN ON THE CURRENTLEVEL

p.5 PRICE GAMES ANNUL THE COAL IMPORT TENDER?p.6 THE CONTRACTORS DEMAND RECEIVERSHIP FOR BETON

FROM BITOLAp.7 STOPANSKA BANKA OFFERS SET OF CREDITS FOR MICRO

AND SMALL BUSINESS p.8 MICROSOFT CONTINUES INVESTING IN THE COUNTRYp.8 MALL OF MACEDONIA IN SKOPJEp.8 THE GOVERNMENT TO DISCUSS WITH ESM-EVN REGARD-

ING THE DEBT OF OHISp.8 MBI 08.04.2008

p.8 GRUEVSKI PROMISES THAT THE GREEK VETO WILL NOTSTOP THE REFORMS

p.9 FORMER WORKERS OF TEXTILE FACTORIES BILJANA ANDPOLITEKS DEMAND THEIR MONEY

p.9 RADE KONCAR OVERCOMES CRISIS AND REHABILITATESVECER

p.6 THE VETO WILL NOT STOP THE REFORMSp.6 IMF MEMBERS PRAISED US, BUT RECOMMENDED TO

TIGHTEN THE BELT!p.7 MACEDONIAN IT SECTOR CAN RACE WITH THE WORLDp.7 EVN WILL DISCONNECT OHIS

VREMEp.1 IMF CLAIMS MORE EXPENSIVE ELECTRICITY AND LOWER

SALARIESp.6 THE NEW HARVEST STARTED WITHOUT CONTRACTS AND

DETERMINED PRICEp.6 AMERICANS ARE LOOKING FOR MACEDONIAN PARTNERSp.6 WE HAVE COAL, BUT THERE ISN'T ANYONE TO BUY ITp.6 FOREIGN EXCHANGE RESERVES OVER 1.5 BILLION EUROSp.7 GOVERNMENTAL ANTI-MARKET MEASURES MADE COMPA-

NIES SHORT SLEEVED p.7 LESS SPENDING OF THE STATE MONEY AND EXPENSIVE

ELECTRICITYVEST

p.6 AMERICAN COMPANIES SEEK FOR PARTNERS IN MACEDO-NIA

p.7 IMF: THE GOVERNMENT TO SAVE MONEYNOVA MAKEDONIJA

p.5 IMF SUGGESTS RISE UP IN THE ELECTRICITY PRICEp.5 STARTED THE CONSTRUCTION OF AMBOp.5 MAVROVO ACCEPTS INGRA`S OFFERp.5 YOU CAN COMBAT INFLATION BY SAVING THE BUDGET

SURPLUS SPIC

p.6 IMF ADVISES ELECTRICITY TO INCREASE IN PRICEp.6 OHIS ONE HOUR WITHOUT POWERp.6 SALTY PATRIOTIC FISCAL BOX CASHESp.6 THE VETO WILL NOT STOP THE FOREIGN INVESTMENTS

The news for the audit, assessments andthe recommendations from IMF team to Mace-donia are dominant on the front pages of to-day's editions of the daily newspapers. The In-ternational Monetary Fund has praised the eco-nomic growth and progress of Macedonia, butsuggested interests increase and limited budg-et spending. They believe that the measures ofthe monetary policy are not enough for dealingwith the inflation, but that the Governmentshould start intervening in the fiscal policy. IMFrecommends: Instead of planning Budget revi-sion to spend more, incomes should be saved.They cannot understand why the state, not thecompanies, pays for the expensive electricityimport. The electricity price in Macedonia isamong the lowest in the region, and the largeexpenses for electricity import this year will pro-bably be much higher than planned. This leadsto an increase of the financial losses, therefore,in order to stop the further increase of the pri-ces, the Government has to react in the fiscalpolicy and the Central Bank has to react withthe monetary instruments. This is a recommen-dation of the Chief of the IMF Mission, Mark Gri-ffits, at the end of the visit, which purpose thistime was not an assessment of the arrange-ment, but the current economic conditions.

- While the economic growth remainsstrong, the macro-economic pressures haveincreased. Within the monetary and fiscal poli-cy now there has to be steps taken for limitingany increase of salaries and prices again, in or-der the inflation rate to quickly reduce- Griffiths

said.Regarding the general economic condition,

IMF is pessimistic. - The world gets into the big-gest crisis. According to their prognosis, thechances for global recession are 25 percent.This year the global economy will be markingan increase of 3,7 percent, which is the small-est increase of domestic gross-product since2002 and much lesser than the already predict-ed 4,1 percent. It is thought that the crisis theworld has been covered by will be the biggest,bigger even than the one in 1929. The interest-ing thing is that both crises have the same so-urce, the USA. - International corporations arelooking for Macedonian partners is the secondmost topical news published in today's editionof the daily newspapers. - We need real part-nerships with companies from countries suchas Macedonia with purpose to support the wideeconomic development, announced NickFermor, vice President of the Board of Directorsof General Dynamics on the first Macedonianconference for Suppliers and Investments, or-ganized by this corporation, the Government,and the ambassadors of USA and Great Britain.

The conference was attended by represen-tatives of several major multinational compani-es, such as 3M, Computer Science Corporati-on, and Hewlett Packard, as well as by 45 Ma-cedonian companies, their potential partners.

In an interview for the daily newspaper Ve-cer, Aleksandar Pajkovski, director of DunaComputers, says that the Macedonian IT sectorcan compete with the world. According to him,

by implementation of the most modern and themost actual IT achievements we can be rivals tothe others in the region.

Utrinski vesnik published that price gamesannul the coal import tender. The main reasondue to which ELEM has decided to annul thecoal import tender is that the firm this companyfavored did not offer the lowest price per ton ofcoal. Namely, two out of thirteen domestic andforeign companies that delivered bids offeredlower price than the favored firm of ELEM, sothe plans failed and the Commission for PublicProcurements within ELEM was unable adoptthe decision only one company to get the ten-der.

Biznis informs that the General Assembly ofthe Association of Balkan Chambers (ABC),from Istanbul, Republic of Turkey, has sent me-ssage to the EU member countries for consis-tent application of the agreements for facilitati-on of the visa regime with regional countries,which is one of the largest business limitation atthe moment. The total trade exchange amongthe countries of the Balkan region annually co-mes to the number of 1.5 billion dollars. It is ma-de by over 2 million companies and it is the po-tential that should bring maximum advantagesto the regional countries and be basis for theirdevelopment. Despite such economic potential,the region still has not done a regional productand regional offer-was the conclusion of theGeneral Assembly.

1.IMF MEMBERS PRAISED US, BUT RECOMMENDED TO TIGHTEN THE BELT! (*****)2. AMERICAN COMPANIES SEEK FOR PARTNERS IN MACEDONIA (***)

2. TOP NEWS - IMPORTANCE BY NUMBER OF PUBLICATIONS


BASIC METALS MANUFACTURING - SUPPORTING PILLAR OF THE MACEDONIAN ECONOMY

SUPPLYING ELECTRICITY ON THE MARKET- WRONG?

The increasing production trend of thebasic metals in Macedonia, initiated afew years ago, resulted in a $1.327 bil-

lion for 2007, which represents 39.5 percentof the total export. Historically, in the highestreal GDP growth of 5.1 percent made lastyear, according to the statistics 2 percent aremade by this very branch, which has the epi-thet of a supporting pillar of the Macedonianeconomy. Because there are no good argu-ments by just looking from the numbers,these together with the evident expan-sion of the steel industry world wide werepointed out as fundamental reasons inthe request of the metal manufacturersfor the Government to respect and imple-ment the National Restructuring Strategyof the Steel Industry. Under the requestformulated as creating normal conditionsfor business and development of thisbranch, representatives of Makstil,Silmak and FENI actually emphasizedthe problem with the energy support fortheir production, i.e. they asked the stateto reinvestigate the legal model onceagain, according to which the major con-sumers supply electricity on the market ontheir own. As pointed out by the EconomicChamber of Macedonia, the concept iswrong and it does not give security in theactivity and causes hesitation the intention ofmaking further development investments.

- For progress one needs stability in theoperating, regulations and rules of play,which would have a long lasting effect, i.e.wouldn't be changed too often. I am con-

vinced that the current manner in which themajor consumers are supplying electricity ontheir own is wrong. If objective analyses aremade so that we could receive cheep nightelectricity, as it was the case until last year, itwould be much more worthwhile and usefulfor the state, compared to the situation nowwhen we are left by ourselves on the market- Mihajlo Mihajlovski, CEO of FENI Industry,points out. It would be much more favorable

for these companies to be given around 20percent of the required electricity by thestate, because this would give them addition-al psychological security that someone takescare of them, takes care of their existencedevelopment and prosperity. This would pro-vide further investments in these capacities,help improving the ecological standards, andthe economical development and the exportof the Macedonian economy would increaseyear after year. As Mihajlovski explains, theshareholders of FENI invested in a second

technological line and are prepared to investin a third one. It is a matter of a 200 milliondollar investment which would be realized in18 months; however these activities requirecertain preconditions that should be guaran-teed to the shareholders by someone.

The directors of these companies pointout that the expensive electricity is directlydecreasing the ability to be competitive,because according to electricity price data,the major consumers in Macedonia pay themost expensive electricity. - Silmak was mostaffected by the lack of electricity, because itparticipates with 50 percent in the end prod-uct price. After we restarted production, thenight surpluses only meet 8 percent of ourneeds, and we have to import the rest. Thebest way to see that this is damaging forSilmak is the fact that the total import togeth-er with the electricity would cost Silmakaround 25 million euros. At the time when wewere obtaining the electricity from domesticsources, the import ranged between five andseven million euros, and the export last yearand this year as well is going to reach a valueof 50 million euros (including the two mountsthis year when the factory was not working)-Svonko Stojanovski, director of Silmak says.

In addition to the claim that theMacedonian metal manufacturers pay thehighest price of electricity, they presented thedata that the major suppliers are paying 80euros per megawatt hour, which is a pricehigher even then the one paid by the produc-ers in Italy, which is considered to be a coun-try with the highest price of electricity in

Europe. Actually, as Mitko Kochovski,director of Makstil, points out the price ofelectricity we buy on the free marketreaches 93 euros megawatts per hour,due to the additional expenses created bythe process of delivering the electricity tothe major consumers in Macedonia. Theconsumers in the other countries of theEU pay between 50 and 60 euros.Therefore, as Kochovski emphasizes,regarding the fact that the production ofbasic metals represents a generator forthe country's development, we are notasking the state to give us money, butenergy support for our ongoing current

and growing production needs.

A second problem with the same weight,for which solving the state needs to beincluded, is the inappropriate transport infra-structure, as presented by the representa-tives of the metal production plant. As we allknow, due to the geographic location,Macedonian companies are handicapped,because they face additional expenses fortransport of their products to the nearestports Thessalonica, i.e. Burgas as an alter-

Under the request formulated as creatingnormal conditions for business and devel-opment of this branch, representatives ofMakstil, Silmak and FENI actually empha-

sized the problem with the energy supportfor their production, i.e. they asked the stateto reinvestigate the legal model once again,

according to which the major consumersobtain electricity on the market on their

own


native. Considering that the production ofbasic metals increases each year, as an illus-tration, last year 15.3 thousand tons of fer-ronickel were manufactured, than 79 thou-sand tons of ferrosilicon and over 900 tons ofrolled metal sheets, it is becoming obviousthat there is a need for these kind of loads tobe appropriately restructured and for thetransport to be developed in order for theincreased quantities to be transported.However, neither the roadway potential northe railway meets our current and not tospeak of our growing needs-

Kochovski concludes. FENI Industry isalso not satisfied with the transport infra-structure, because although the companyhas an agreement with MacedonianRailways 80 percent of the 2 million tons rawmaterials and products both imported andexported to be transported by means of therailway, and 20 percent by trucks, in realitythe ratio is fifty-fifty. The railway is not pre-pared to meet our demands neither with asufficient number nor with an adequate typeof railway wagons - Mihajlovski says. - Ifthere are no investments for improvement ofthe transport infrastructure, it would alsoinfluence the production. What's the point inproduction if we cannot transport the prod-ucts to the nearest commercial destination?

The representatives of these companiesagree that the National RestructuringStrategy of the Steel Industry, which derivesfrom the Stabilization and AssociationAgreement between Macedonia and the EU,obliges the state to provide normal marketbusiness of this branch, in order to use theprice relation on the global market and theentire global opportunities in this segmentmore efficiently. Actually, these companiesare also implying on the Law on State Aid,which according to them, gives the state anopportunity to assist in surpassing certainproblems of the companies, which are ofgreat economic importance. However, asBorka Spasovska Gerasimovska from theMinistry of Economy explains, the nationalprogram envisages the use of state aid forthe steel companies, but not for the directproduction process, but for the projects

aimed for research and development on onehand and projects which concern the ecologyissues of these subjects on the other. Theuse of state aid according to this program inany other way would mean closing down thecompanies.

V.M.

Expansion of steelGlobally the movements show that the production and use of basic materials are expe-

riencing unseen expansion. The consumption of ferroalloys and steel is increasing. Newcapacities for the steel industry are being built in China and India and other countries. Asdirector of Makstil, Kochovski, explains this is another confirmation that steel remains thesole leading construction material and as long as the global economy has developmentambitions the demand for steel will be great. - The results we have achieved both as quan-tities and foreign currency inflow are a confirmation that the manufacturers of basic metalsare the most influential creators of the macroeconomic aggregates in the country. Theydeny all interpretations and opinions of separate structures that this is a production of cer-tain past times, that there are more propulsive activities… It is correct that these branchesexist in the structure of the global industry, however we have this and we are trying to effec-tuate it in the best possible manner. Therefore our country should consider the presenceof the leading metals in its economy as an advantage, and not a handicap - Kochovskisays.

European ecological standards

The need to include the state in sup-porting the power supply and the recon-struction of the transport infrastructure isinevitable, in order to provide better work-ing condition for the companies in this lineof work. A very important moment is thatby the adopting of the Law on Envi-ronment, which contains European direc-tives, we would have to obtain integralecological permits, operation plans thatrequire acquiring the best available tech-niques in our branches. That means in aking of conjunctional moment like the onenow on the global market, we have to cre-ate economic potentials, to profit and par-ticipate as much as we could, because it ispossible not to be able to work after theaccession in the EU if we do not meetthose criteria - Mihajlovski from FENIIndustry emphasizes.

Growing export and solid salariesThe production of basic metals in 2007 recorded a 34.3 percent growth compared to

2006, and in the first two months this year the increase is 19.8 percent compared to thesame period last year. Last year the export of products was the following: ferrosilicon of31.2 million dollars, ferrosilicon manganese of 58 million dollars, which is a ten timeincrease compared to 2006, ferronickel made over 528 million dollars, hot rolled metalsheets of 271 million dollars, and cold rolled metal sheets of 72 million dollars… Apart fromthese the metal processing factory is important for the country and the number of engagedworkers. - These companies according to our calculations employ around 5 thousand peo-ple. If we use the world experiences that each employee in the heavy metallurgy employ-ees another 5 to 8 workers, this means that indirectly we have around 30,000 workers inthis line of work - director of Silmak Zvonko Stojanovski explains. This is also confirmed bythe case of FENI Industry, which employees around one thousand workers, and each daythe factory together with the mine has another thousand workers employees in Fiord,Vatrostalna, Tehnogas and other small companies, which all together compose a verydependent and connected chain. Apart from this an important fact is that last year FENI allo-cated 12-13 million dollars for salaries and paid million dollars for gross contributions,money which staid in the country and in the City of Kavadarci - Mihajlovski says, adding thatthe average salary in the company is around 27 thousand denars which is well above theaverage in the country.

CORRECTIONWe inform all shareholders of RZ

Institut a.d. that in berzNIK in number 16from 31.03.2008, page 11, NEWS STOCKEXCHANGE, a mistake has been made inthe caption and instead of: "Institut withminimal loss compared to the last financialyear" was supposed to be: "Institut endedthe financial year with profit".

Last year successful for RZInstitut The joint stock company Institut a. d.,

except the bigger difference in numbers inthe part Changes of the stocks of the fin-ished products and production inprogress, where bigger costs are reported,does more significant turbulences are notnoted. Last year the company notes in-crease of profit form sales of total amountof 308,895,510,000 denars, contrastedwith the reported 233,607,142,000 de-nars. In the area of operation work report-ed profit of 23,104,053,000 denars, whichis also an increase compared to the lastyear when it was 15,790,338,000 denars.In 2007 the company has noted positivenumbers in more segments, which resultsin net profit of 19,431,876,000 denars, anamount that is an increase compared to2006 when the profit was 14,174,737,000denars.


GORAN KOEVSKI, PROFESSOR AT THE FACULTY OF LAW

WE ACCEPT NORMS EASILY - IT'S MENTALITY WE CHANGE WITH DIFFICULTY

How much is the Codex for CM of the joint-stock companies accepted by the managementstructures in Macedonia?

- CM is still in the sphere of what's calledsoft law which means recommendation, instruc-tions, good practices. It's not a code that is bearby the country, the Parliament, but by well-known international organizations, OECD, IFCetc. Why we prefer using this principle? Beca-use in many transitional countries the peopleare still not ready to accept it as a code.

Since the beginning of 2007 the Codex forCM of the joint-stock companies listed on thestock exchange was passed here, and as of re-cently the companies that are on the super-list-ing have an obligation within their yearly finan-

cial report to give statementfor coordination with the Co-dex for CM, which is a pha-se up. But these are onlyfour companies, which issurly not enough to say thatthis code has been widelyaccepted.

To what extent is trans-parency in Macedonia withinthe one in the other countries,or they are more extensiveand wider?

- The reports from ourcompanies are in scope ofthis transparency. We followall directives, recommenda-tions etc. We are pretty res-ponsive in this segment. Weaccept these things quickly.On the conference for thecountries candidates andpotential candidates formembership in Brussels,within which was the focusof CM, we took the first pla-ce pointed as country withthe best laws but also as acountry with poor applicati-on of this codex. However,it's one thing to accept so-mething as word as a code,and another to changementality and realize what's

the benefit if you do it. This is exactly the partwe are pretty slow in. When it comes to mentali-ty the fear appears for the capital's origin inconditions when the legal institutional country isnot completely built. I'm not saying everythingwas done illegally, that was the frame, it wasthe way the capital was earned, the intentionwas no to make tricks. They played within thislegal frame that was set.

What's the world's practice of CM on domi-nant and small shareholders relation? They mustbe dominant in more companies?

- It's good. But there can be joint compa-nies. Like the ones we have here. Only thatabroad the supervision is so strong that theyimmediately state if this connection is being

abused. Like for example, now in Macedoniathe Law on Payment Operations forbids assig-nations, compensations, balances… Becausejoint companies are being formed so they makecompensations among each other. Here thecountry is amnestied because it cannot controlthis, and therefore the law forbids it. I thinkthat's not the idea. This kind of work relation isallowed everywhere in the world. Meaning,allow such model of CM to the joint companieswith big banks in the middle, it's a German-Japanese model, but have capable controllerswho can conduct supervision if they are abus-ing it or not and punish them. So that you cangive positive example.

You mentioned the banks in relation to theCM. In our country the banks are dominant share-holders everywhere, unlike in the world where it'sthe other way around?

- In America this is forbidden, but not inGermany. But there is a good supervision. Thenew Macedonian Law on Banks is pretty goodin this segment. It forbids controlling participa-tion in non-financial sector. If one looks into theNBM's decision on CM, they can see that it isalmost completely dedicated to better Supervi-sion committee, better control over the Board ofDirectors and greater responsibility of its mem-bers. So, their responsibility it being establishedsince they realized where the weakest chain isand legally reacted in that part. This is positivething.

How much is CM applied globally. To whatextent CM affects on the company's image increa-se, are sanctions taken if it's not obeyed?

- Corporative management affects the com-pany's image. One asks the question why afterall scandals in America, Enron, Wrotcom, the ci-tizens are still investing in shares? Why theydidn't lose the trust? So it means the systemworks. And why? Because the key head execu-tive directors of the biggest embezzlements en-ded with 25-year imprisonment, without anyright to amnesty before 13 to 15 years of theirtime pass. That is why everyone still investsand will continue investing because the wholefinancial system is based on the small share-holders, their protection.

Unlike the USA, Europe is prone to domi-

Corporative management (CM) signifies the manner companies are run and controlled by, as well as the relations that arebeing established between Supervision committee, management and the shareholders. This actually refers to the way the

persons who provide the company's capital assure themselves that they will gain profit from their investment. The conceptof corporative management in the economy of Macedonia is still new. Nonetheless, millions of new shareholders and thou-

sands of newly privatized companies are concerned with it. As to how much the CM is accepted in Macedonia we are talkingwith Goran Koevski, professor at the Faculty of Law and author of the book Corporative Management and the brochure OECD

Instructions for corporative management with state enterprises.


nant shareholders, because that way the coun-try has greater influence on economy. I'm talk-ing about continental Europe without England.Here there's big interference of the country,which through dominant shareholders in 10 to15 biggest companies it can lead economic pol-icy. So, big banks, 10 to 15 big companies areenough to lead some kind of policy. This hap-pens in Europe too, not only in our count-ry. We are just distorted version of it.

So Macedonia received high assess-ment on the legal regulation's adoption. Wehave transparency of the companies, in a waythey accept the CM, but there are no newemissions of securities to collect capital.The big companies trade internally, whichmeans that in most of the cases there is over-flow or concentration from bigger to smallernumber of shareholders?

- Only vinery Popova Kula so far hada source of new capital in sense of Initialpublic offer. This company issued newshares to collect extra capital. And that'sthe "forerunner". Since wine production isattractive business, the evaluation of ac-cepting the Initial new emission of shareswas absorbed from the public and in thisspecific case it was good. There was inte-rest. When I discuss on this topic I seecompanies in two levels. Companieswhich were formed on the basis of trans-formation and privatization. With few ex-ceptions, there was almost no transforma-tion. While with the privatization the own-er changed nominally, but very few com-panies had creation of new value. But thenew ones consciously keep the status ofsmall and middle-sized companies so thatthey do not go up, that closed is the mar-ket. Well now, the Government is makingsome steps, according to me pretty unselective-ly, without an idea. In order to bring externalshareholders, outsiders to these closed share-holders' groups, the Government annulled theright to initial purchase of shares from newemission. It banned it by law, which in my opini-on was very stupid because this is world stan-dard. Imagine another situation, a foreignerwho invested 60% in a company and wants toincrease his capital after a while, to be told hehas no priority. This destroys an already establi-shed structure of relations. So, the Governmentwanting to do something good, to break thestructures, bring people from outside, picked awrong way. Now there are announcements thatthe Government wants to bring it back, since itis a world standard - Right to initial registrationif the shareholders don't step back. The law de-prived them from this right. Which in my opini-on, is bad. Opposite to this move, I think thatthe amendments to the Law (in March last year)which abolished issuing shares to employees,were good. Restrictively this will apply until2012. This is good because in a time of this un-employment, as shareholders the employeeswere abused the most: sell me your shares orI'll fire you. What is going to happen? From theFund, they will buy own shares with the compa-ny's money and give them to the employees.This provision is good. It will not be abolishedbut prolonged to certain period of time until so-

me things are settled in post- privatization man-ner. Unfortunately, such model got out of thegame.

Initially, the idea-paid privatization, insiderone, was not that bad and we saw what itturned into, while the other countries moved for-ward because they had vouchers that they

gave to Investment funds which played on thestock exchange, much more professionally andmuch more informed.

Do you think paid insider privatization to theentire model we applied?

- Initially that was the idea, for the personsinside with 30% discount etc. But unfortunately,like everything else in Macedonia, this too gottwisted. Everything that's a good idea in thebeginning gets completely different dimensionat the end.

In Croatia and Serbia for example, the coun-try gave free shares to all citizens. Will we see thishappening in Macedonia as well?

- No, we will not because the "goldenmines" got sold. This is nothing but politicaldecision. Many parties did this. After evaluationthe capital they realized that politically it paysoff to them to share part of the cookie to the cit-izens for free. This way one could get a senseof belonging in certain country, actually that thecountry is thinking of you by giving you some-thing. In our country the purchase price went inthe Budget, out of where one can hardly see thebenefits for the citizens. This way the govern-ments can win over the citizens with somethingsmall.

There are examples of big companies, whenthey reach certain level of development the ownersshare shares to the employees in order for them tofeel the company as their own which increasesresponsibility and effectiveness. Are there possi-bilities of something like this realizing in Mace-donia too?

- That's a worker's shareholding.For now it's not the time. In Americapeople know exactly why this occurs.When you make a fortune of one billiondollars it is very easy to become philan-thropist, to become benefactor andgive shares away. But until you get tothat level and that fortune, it's far frommoral and business ethics or anythingelse. So there will be time when peoplewill feel rich enough to do this.

You have attended many education-al seminars about the animation of Law onTrade Companies and CM, were part ofthese seminars implemented among themanagers, the management structures?

- At the beginning, five to six yearsago the education was carried out withthe top management. Now the peoplefrom the lower level are sent to thesetrainings. Unfortunately we had oneproject with the Institute open society-Good ruling and among the otherthings the CM was also good. The fe-edback was very hard to get answers toour questions, which brought us backto the beginning- the fear of the unfami-liar. Why and who is behind all this?Why this is the way, if something is ga-ined honorably and legally, why thefear? There are certain theories and itis so in Germany, societies of invidious

citizens, where people envy each other, beca-use of what the personal fortune is nevershown, exactly out of some kind of embeddedmentality- the social concern that we are allequal. Maybe there is something to it. Like forexample, I have been to Lubeck, above Ham-burg, in a nursing home that exists since 1200.Imagine even back then they had a need to ta-ke care of the helpless, health insurance etc,this theory too holds water.

So again it's all about the way of gainingcapital. Everyone who has suspicious elementsfears to show their capital, and there is alsoanother ground- no matter how honorably youearn something, you are going to be stick a la-bel, political extortion…

To what extent the CM suffers because of po-licy?

- Political and Corporative management aretwo twin sisters, who got separated once butstill have same logic of understanding. Andwhere comes Macedonia here? It is good, peo-ple talk about CM, there are trainings, it is beingintroduced, but the effect would be successfulstory. We are at the beginning but there is nopublic promotion. We have no example of suc-cessful CM story.

M.B.


IMF SAYS:

The Government has to save and clearly spend thebudget money, especially in the power sector. Theinflation has to be brought to low, one-figure rate

The economic moment continues. Theincrease of realistic GDP exceeded 5% in2007, and the increase of industrial pro-

duction exceeded 10% in the beginning of2008. Nevertheless, the macro-economic pres-sures increased. Inflation increased to 10% onyearly basis in March, mostly as result of thehigher world prices of food products and ener-gy. The bigger import of cars, energy and foodproducts, as well as the certain reduction of theprivate transfers from abroad have increasedthe open account's deficit.

- In circumstances like these theGovernment has to go with controlled spendingof budget money and clear financing of theenergy sector.

These are the suggestions the IMF gave tothe Government after the one-week mutualanalysis about what has to be taken to stop theinflation's increase and soften the price shockfor the citizens. Food price will stabilize, butthere has to be price correction of the power,monetary experts say. The Government has tosave money and clearly spend the budgetmoney, especially in the energy sector. Inflationhas to be brought to low, one-figure rate.

The mission's chief, Mark Griffiths, sup-ports the National Bank in its plan to increaseinterest rates to 6%, but at the same time totake over additional measures to reduce thefast increase of loans, and the Ministry ofFinance to strictly control the emptying of theoverloaded budget:

Instead of preparing a budget revi-sion, what's important is these incomes to besaved now. This should stop the increase of theopen account's deficit, reduce the inflation,dropping it to low, one-figure level. The unclearfinancing of MEPSO and ELEM's lossescaused by the high price of the importing poweris the biggest stroke to the state register andremains to be risk for the budget. According toGriffiths, there has to be correction of the elec-tricity price for the households.

Electricity price in Macedonia isamong the lowest in the region. Nonetheless,the high expenses for power import this yearwill most probably be much bigger than it wasplanned. These losses are supposed to bedirectly included in the budget, and the tariffsfor the households to gradually increase inaccordance with the international prices.

Vice-prime minister Zoran Stavreski howev-er, defending the Government's policy, saysthat keeping low price of electricity means pro-

tection from greater poverty of the citizens:

As a country we are ready, throughmore frequent transfers, if necessary, to pro-vide enough financial funds so that the finan-cial liquidity and position of MEPSO and ELEMis stable. Until the possible early elections wewill go at the speed of 60km/h and afterwards

even faster, Stavreski said.

Minister of Finance, Trajko Slaveski,on the other hand, is convinced that the annualinflation rate will be no more than 5% and thatthe prices will stabilize. The prices increase thisperiod has reached the top and we have beenat the same level for a month, which we expectto further on turn into reduce of inflation rate. Bythe end of this year we expect the inflation ratenot to be over 5%.

In time of increase of macro-economicchallenges, it's necessary to continue the struc-tural reforms to stimulate growth and reduceunemployment. The mission again insists theGovernment reducing the expenses for workforce. The minimal bases for social contribu-tions to be reduced and finally annulled. Withthese reforms the companies and employeeswill get back in the formal economy and reducethe unemployment rate. The mission alsoinsists the Government to stick to the timeframework set by the Program for integration ofsocial contributions payment, as well as tocoordinate their bases using the actual oppo-site to the agreed salaries.

The mission for the fourth review of theGovernment's Program supported by the Fundwas initially planned for June.

AFTER THE STANDSTILL IN MAKSTIL`S FOUNDRY

The standstill in the production of thefoundry of AD Makstil will have an effecton the planned working of RZ Institut AD

Skopje, it is stated in the announcement of thiscompany submitted to the Macedonian StockExchange. Namely, certain part of the produc-tion program is meant precisely for the needs ofthe Foundry. According to the announcement,they are to reduce the planned delivery oftorque mass to 75 tons ramming mass a month,TROSKA conditioner-54 tons a month anddolomite lime-255 tons a month. The totalreduction of the planned realization for a singlemonth will cost them around 6 million dollars.As far as the standstill in the delivery of Al-Leguri for AD Makstil-Foundry, which is around40 tons a month, will be sent to other compa-nies. There is a great demand for these alloyson the market.

Should the standstill lasts for a longer peri-od of time, the aggregates that will be out of useare planned to be utilized as alternative solu-tions for production of other products for themarket in this metallurgic branch. There is activ-ities plan for this purpose. In case of shorter

production standstill, on the other hand, thesame will be used for production capacitiesoverhaul. There is activities plan for this option.

Part of the employees are most likely to besent on vacation, part will be engaged in theproduction of aluminum and copper alloys andpart of them may even be sent on forced leave,however, everything depends on the duration ofthe standstill period. We are talking about 15direct executors in the processes whose pro-duction will be stopped or reduced. The expertstaff from these processes will be working onprojects for introducing alternative solutions fornew production.

The other organization units- Zavod zaAluminiumski Leguri, Zavod za Bakarni Leguri

and other services will be functioning withincreased dynamics. There will be increasedworking dynamics in the organizational unitOdrzuvanje, which will be constantly engagedfor the current works and the planned overhaul.

RZ Institut AD Skopje expects that thefoundry`s standstill will be short-termed andwon`t prompt major shuffling in 2008 Plan andundertaking appropriate actions in accordancewith the situation. Should this occurs, the planwill undergo reprogramming and appropriateactions that fit the conditions will be taken.

The current working in the opening threemonths is going accordance to the plan andthere will be more specific information after thequarter statement of success of this joint stockcompany.

SAVE THE COLLECTED MONEY,DON'T DO BUDGET REVISION

RZ INSTITUT TO CUT DOWN ON PLANNED

DELIVERIES


1. KRKA WITH A SUCCESSFUL RECIPE FOR THE MACEDONIAN MARKET (*****)2. MACEDONIA IS A GOOD OPPORTUNITY FOR THE FOREIGN INVESTORS (****)

10.04.2008 THURSDAY

The opening of the distributive centre of theSlovenian pharmaceutical company Krka inSkopje is top news in today`s papers. Accordingto Joze Colaric, Macedonian market is of greatimportance for the company, because 120 medi-cines present in our country realized a turnover ofone percent form the total sale of Krka in the worldi.e. around 10 million euros.

Newspapers announce another foreigninvestment. It is about construction of the busi-ness center Megi, an investment of 10 million dol-lars. Investor of this object is Macedonian -Bulgarian company Media Investment. From thetotal financial construction 50 percent areMacedonian -Bulgarian company investments andthe other are provided by NLB Tutunska Bankacredit line.

Newspapers also inform about possible coop-eration with the American and Britain companies,more employment, investments and import. Thisis also the expectations of Vele Samak from thetwo-day conference for suppliers and investmentsheld in Skopje. On the conference organized byGeneral Dynamics Corporation and theGovernment, representatives of more Americancompanies as well as 50 domestic companiestook part. Some foreign investors announced they

plan Macedonia as potential destination for theirinvestments. Newspapers inform about ErnardBusek, special coordinator of the Stability Pactaccording to which investment climate in thecountry and the wider region is suitable.

Great decline of Macedonian Stock Exchangeis the headline of the broader analysis of today`sDnevnik, who informs that Macedonian StockExchange belongs in the group of regional mar-kets with greatest decline of the stock turnover inthe first three months this year. The Official dataindicate that the total turnover of MacedonianStock Exchange dropped by 65.9 percent in rela-tion to the same period last year. The biggestdecline records Saraevo Stock Exchange of even83.65 percent. Zagreb Stock Exchange recordsgrowth of 30.66 percent. The total turnover ofMacedonian Stock Exchange for these threemonths this year is 51.9 million euros and accord-ing to this indicator the country it is the lowestturnover compared to other Former Yugoslavianrepublics.

The thermo power plant Oslomej didn`t makeit to May general repair, inform newspapers. Thelack of electricity is compensated throughexchange with Greece, and ELEM claims thatOslomej is being disconnected due to prepara-

tions for the regular annual general repair in May,not due to burst boiler`s pipe. Company neitherhas concrete explanation about the reasons ofthis technical operation nor can tell whether it isusual procedure to stop the production when diag-nostic of the equipment is performed i.e. detectingplaces that can cause problems in the production.

Another news from today`s newspapers isthat the tobacco producers may export tobacco bythe latest amendments of the Law on tobaccowhich within 10 days shall be delivered to bereviewed in Macedonian Assembly. Except theimport`s liberalization the Ministry of Agriculturewill recommend reduction of criteria for receivingpurchase permit. Representatives from Farmer`sFederation, Union`s Agrarians and minister foragriculture Aco Spasenoski agreed the amend-ments of the Law.

The president of the World Bank Robert Zolinwarns that the food will maintain the high price ona longer period, informs Nova Makedonija. This isa result of the great demand in the world and theconsumption of biofuels as alternative energy.The food price increase trend of one hand willbring benefit to developing countries and theiragriculture sectors, but due to expensive food,many citizens will be feeling the hunger.


DNEVNIKp.7 KRKA WITH A SUCCESSFUL RECIPE FOR THE MACEDON-

IAN MARKETp.10 TEC OSLOMEJ SWITCHED OFFp.10 SAMAK BELIEVES IN MORE INVESTMENTSp.11 SHARE TURNOVER CUT IN HALFp.11 THE WORLD TO LOSE 1.000 BILLION DOLLARS p.11 THE OIL PRICE IS EXPECTED TO BE REDUCED

BIZNISp.7 MACEDONIA IS A GOOD OPPORTUNITY FOR THE FOREIGN

INVESTORSp.8 THE ECONOMIC DEVELOPMENT OF THE BALKAN IS OVER

AVERAGEp.10 GASPROM LOSES THE MONOLOLY!?p.14 MBI-10 DROPPED BY 4 PERCENTp.14 THE VALUE OF THE OFFICIAL MARKET IS 39.252.457, 05

DENARSp.14 MBI 10.04.2008p.15 MICRO-BUSINESS CREDITS` PACKAGE BY STOPANSKA

BANKAUTRINSKI VESNIK

p.7 LOWER STOCK MARKET TURNOVER IN THE FIRST THREEMONTHS

p.7 THE TRADE CREATED THE BALKAN MAGNATESp.8 THE TOBACCO PRODUCERS WILL FREELY EXPORT THE

TOBACCO FROM NEXT YEARp.8 KRKA OPENED DISTRIBUTIVE CENTER

VECERp.6 THE UNPAID ELECTRICITY DRIED UP THE WATERp.6 THEY CAME, THEY SAW THEY LEFTp.6 TPP OSLOMEJ SHUT DOWNp.6 KRKA WITH NEW BUSINESS PREMISES

VREMEp.1 THE PATRIOT FISCAL REGISTERS WILL TAKE AWAY 10 MIL-

LION EUROp.6 STATE SHOULD SPEND LESS FOR NO INFLATION p.6 THE TOBACCO MARKET TO BE LIBERALIZEDp.6 THE BANKS ARE STOPPING THE ELECTRONIC TRADEp.6 THE PATRIOT FISCAL REGISTERS WILL TAKE AWAY 10 MIL-

LION EUROp.6 BUSINESS CENTRE TO BE CONSTRUCTED IN SKOPJE

VESTp.6 DEFECT IN OSLOMEJ, WE ARE CONSUMING GREEK ELEC-

TRICITYp.8 THE MACEDONIAN TOBACCO WILL BE EXPORTED UNFER-

MENTEDp.8 BUSINESS CENTER WITH THE BIGGEST CONGRESS ROOM

IN A PROCESS OF CONSTRUCTION NOVA MAKEDONIJA

p.1 THE FOOD WILL BE EXPENSIVE FOR A LONG TIMEp.4 SCISSORS FOR 20 WATER SUPPLY ENTERPRISESp.9 BALKANS - GOOD FOR INVESTMENTS p.9 THE GOVERNMENT WILL HAVE A CONVERSATION WITH

EVN FOR OHIS DEBTp.9 MACEDONIA AND KUWAIT SIGNED AGREEMENT ON MUTU-

AL PROTECTION AND ENCOURAGEMENT OF INVEST-MENTS

p.9 THE PRIVATE AND THE PUBLIC SECTOR TOGETHER AREJOINING FORCES IN CONSTRUCTING THE LOCAL ECONO-MY

p.9 PRESIDENT OF THE CHAMBER OF COMMERCE AZESKI,VISITS GERMANY

p.9 THE FOOD WILL L BE EXPENSIVE FOR A LONG TIMEp.9 KRKA OPENS NEW BUSINESS CENTER IN SKOPJE

SPICp.6 THE FISCAL REGISTERS WILL REMUNERATE THE PRICESp.6 WATER SUPPLY ALSO IN DARKNESSp.6 TPP OSLOMEJ SHUTS DOWN




1. THE FIRST BLOCK OF REK BITOLA OUT OF NETWORK (*****)2. INGRA OBTAINED DOMINANT PACKET SHARES IN MAVROVO (****)

11.04.2008 FRIDAY


Only a day after the defect that happened inthe Thermal Power Plant Oslomej, REK Bitolawas also disconnected from the network, all dailynewspapers inform.

The reason for this is a defect in boiler`s pipe,and according to ELEM it is expected to berepaired within the next 40 hours. It is neitherannounced how it will be done and whether addi-tional power quantities will be required due to thedisconnection of the first block of the REK, nor inwhich way that would be recompensed.Furthermore, ELEM informs that after the two-daytechnical repair, as of yesterday TPP Oslomejstarted producing power again. The news that thehealth institutions around the country were savedfrom power disconnection, even though they wereonly a step away due to the two-million debt, isalso related to the power distribution.

The news that the Croatian company Ingrahas became owner of 51 percent of the capital ofthe Skopje Construction Company Mavrovo ispresent in all printed media. In only three daysafter the public call on shares` purchase, Ingracame to the dominant parcel together with thepreviously held part. In spite of that, the new own-ers will not stop the shares purchase and will buy

until there are interested shareholders who wantto sell the shares for the price of 2,500 denars persecurity, i.e. until the deadline expires.

In the next few months, business activitieswill stagnate due to early parliamentary electionsand a withdrawal of some foreign investors couldalso be expected until the situation in the countrystabilizes. This is the comment of the business-men and investment analysts in today`s Dnevnik.Despite this, the statement of the Vice PrimeMinister Zoran Stavreski that the economic poli-cies must continue irrespective of the possibleearly elections is conveyed in all newspapers. -

We believe that the economic support and theimprovement of the living standard of the citizensis a priority for this and any other government.The intensified implementation of the reformsmust continue - Stavreski states.

However, Macedonian Stock Exchange is thefirst to react on the announcement for parliamen-tary elections with drop of the index MBI-10.According to the comment by Marjan Ivanov, ana-lyst in Ilirika Fund Management, in todays`sDnevnik, foreign investors will not return on theMacedonian Stock Exchange soon. Elections indi-cate uncertainty and increase political instability.

One can already see the effect from the continu-ous drop of the MSE Index.

The concession allocation procedure for theairports is still running, although the Governmentcalled the Assembly to vote for parliament dis-missal - is the news that could be read in the print-ed media. Yesterday, the Government announcedthe public call on selection of concessionaire forthe airports in Skopje and Ohrid, as well as forconstruction of the new cargo airport in Shtip.However, the Government stand about this issueremained undefined.

Vreme and Spic write about the protest by theemployed in the forwarding companies and serv-ices of the customs terminal in Strumica againstthe decision of the Customs Management to closethis terminal, which is distanced 33 kilometresfrom the border passage Novo Selo. According tothem, Strumica economy will be affected the mostand 150 families will be left without a job.

Today`s media announce the beginning of theNinth Annual Conference of the MacedonianStock Exchange that will take place in Ohrid.

This conference has international characterand will be attended by many experts and speak-ers of the securities market field.

DNEVNIKp.7 MALFUNCTION IN THE THERMAL POWER PLANTS CON-

TROLp.12 MACEDONIAN STOCK EXCHANGE FIRST TO REACTp.12 THE BUSINESS STAGNATES DUE TO ELECTIONSp.12 AMONG THE LAST IN THE WORLD ACCORDING TO THE

TECHNOLOGIC DEVELOPMENTBIZNIS

p.1 OFFICIAL MARKET`S PARTICIPATION OF 81.63 PERCENTp.5 THE GOVERNMENT ANNOUNCED PUBLIC TENDER FOR

NEW OWNER OF THE AIRPORTS p.14 MBI STILL DROPSp.14 FROM 261 TRANSACTIONS, HAVE BEEN REALIZED 37,7 MIL-

LIONS OF DENARS p.15 NINTH ANNUAL MACEDONIAN STOCK EXCHANGE CONFER-

ENCE p.15 OFFICIAL MARKET`S PARTICIPATION OF 81.63 PERCENT

UTRINSKI VESNIKp.9 AFTER TWO DAYS OF INTERRUPTION TEC OSLOMEJ AGAIN

IN OPERATION p.9 THE FIRST BLOCK OF REK BITOLA OUT OF NETWORKp.9 INGRA NEW OWNER OF MAVROVOp.9 ANNOUNCED PUBLIC CALL FOR CONCESSION OF THE AIR-

PORTSp.9 THE HEALTH CARE INSTITUTIONS WERE SPARED FROM

POWER DISCONNECTIONp.20 MACEDONIAN - BULGARIAN BUSINESS CENTER MEGI

UNDER CONSTRUCTIONp.20 THIRD FLOOR WILL BE UPGRADED ON THE CITY SHOP-

PING MALLVECER

p.6 INGRA OBTAINED DOMINANT PACKET SHARES IN MAVROVOp.6 CIVIL SAVINGS BANK CLOSES p.6 THROUGH QUALITY STATISTIC TO GOOD ECONOMYp.6 ELECTIONS WILL NOT STOP THE HEALTHY ECONOMIC

POLICYp.7 THE GOVERNMENT IS LOOKING FOR CONCESSIONAIRE

FOR THE AIRPORTS p.7 THE PRICE OF THE MILK WOULD BE MAINTAINED WITH

SUBVENTIONS p.7 THE FIRST BLOCK DISCONNECTED p.7 EVN DID NOT DISCONNECT THE HOSPITALSp.7 EASTER`S CREDIT

VREMEp.3 STOCK EXCHANGE STABILIZESp.3 THE EARLY ELECTIONS WILL IMPOVERISH THE ECONOMYp.6 THE TRADESMEN FURIOUS OF THE PATRIOTIC FISCALIZA-

TIONp.7 THE CUSTOMS TERMINAL IS CLOSINGp.7 A GAP ON PIPE IN REK BITOLA MADE A GAP IN THE BUDGET

VESTp.8 ARROGATED THE CUSTOMS TERMINAL IN STRUMICAp.14 OIL PRICES STEADY NEAR $111 A BARRELp.14 GOOGLE AND YAHOO TO SHARE WEB ADSp.14 AMERICAN AIRLINES CANCELS MORE THAN 1,000 FLIGHTS

NOVA MAKEDONIJAp.1 E-SHOPPING IS PRACTICED VERY LITTLEp.6 MACEDONIAN-BULGARIAN INVESTMENT WORTH 10 MIL-

LION EUROSp.6 PETROLEUM WITH NEW RECORD-BREAKING PRICE -

112.21 DOLLARS PER BARRELp.6 INGRA GETS THE MAJORITY PARCEL OF MAVROVO

SHARESp.7 ENTERS AUSTRIAN GRAVE IN THE REAL ESTATE BUSINESSp.7 DOLLAR HITS A RECORD LOW AGAINST THE EUROp.7 FIRST BLOCK OF REK BITOLA TO BE DISCONNECTED DUE

TO DEFECTp.7 VITAMINKA INCREASED THE EXPORT BY 7 PERCENTp.7 PUBLIC CALL ON GIVING MACEDONIAN AIRPORTS UNDER

CONCESSIONp.7 MBI- 10 CURVED LIKE A SNAKE IN TWO WEEKS

SPICp.8 REK BITOLA- OUT OF ORDER p.8 GRAGANSKA STEDILNICA STOPPED WORKINGp.8 HOSPITALS WILL NOT BE DISCONNECTED FROM POWERp.8 THE TERMINAL IN STRUMICA TO BE CLOSEDp.8 LONG FISCAL DECREES


1. TELEKOM OFFERS REIMBURSEMENT FOR 500 EMPLOYED (*****)2. THE MACEDONIAN STOCK MARKET WITHSTANDS TO THE STRESS TESTS (***)

12.04.2008 SATURDAY

Makedonski Telekomunikacii to sack 500employees with reimbursement of 900 euros foreach year of working span, regardless their work-ing position-inform all of the today`s print mediaissues. In compliance with the program, thisaction will only cover the employees with at leastfive years of working span. The company has theright to denying the request for voluntary leave ofthe employees who will be regarded as essentialfor the work.

An employ can get EUR 22.500 at maximum,provided the employ has minimum of 25 yearsworking span. The decision for voluntary leaveprogram, which was prepared in cooperation withthe company`s syndicate, was adopted at yester-day`s extraordinary session of the Board ofDirectors.

The overall reimbursement budget is ˆ13 mil-lion, explains Dnevnik.

The stories from yesterday`s trade on theMacedonian Stock Exchange are carried bytoday`s issue of Vreme. MDI-10 index yesterdaysuffered a fall of 2,76%. The Index of PubliclyHeld Companies, MBID, plunged by 5, 02% whileBonds Index, OMB, went 0, 05% down. In spiteof the situation of the indices, the StockExchange made great turnover of MKD 182 mil-lion i.e. EUR 2,95 million. The company ICNFarm from Skopje suffered greatest share depre-ciation, 29, 1%.

However, regardless the downward tenden-cy marked by the stock exchange indices, thehome experts remained optimistic. At yesterday`sStock Exchange annual conference, all of themshared the position that the interest for theMacedonian companies` shares will be regained,

but they also expressed doubt whether lastyear`s price boom will happen again in nearfuture and with such intensity.

They ground the optimism on the value andthe profitability of the home companies, but witha dose of restraint due to the unfavorable influ-ences from the political events in the country.According to the Director of the MacedonianStock Exchange, Ivan Steriov, there are positivefactors that are promising capital market stabi-lization. He believes that on middle and longterms, the current financial performances of thecompanies are crucial factors.

- The market segment still hasn`t becomepositive. The Stock Exchange has kept on its feetafter the first stress tests-he says. The potentialsof the Macedonian Stock Exchange are stored inthe great financial results of the Macedoniancompanies for 2007 and the fact that in spite ofthe unfavorable information regarding the non-extended NATO invitation, the turnover remainedat a relatively high level which, according to him,has reflected into a more mature phase of thecapital market development.

The Macedonian delegation led by DeputyPrime Minister Zoran Stavreski and Minister ofFinance Trajko Slaveski took part at the SpringMeetings of International Monetary Fund andWorld Bank in Washington. Stavreski andSlaveski will meet high representatives of theinternational financial institutions as RobertZoellick, World Bank President, Takatoshi Kato,Deputy Managing Director of the IMF and others,informs Nova Makedonija.

The Macedonian delegation will also havebilateral meetings with representatives of IMF

and WB member countries, as well as with theDutch Deputy Prime Minister

Minister of Finance, Wouter Bos, and it willalso attend the regular meeting of the DutchConstituency of World Bank and IMF.

Utrinski Vesnik carries the story that the ther-mal power plant REK Bitola, after 40-hour stand-still, was reconnected to the network today. Themalfunction in REK Bitola took place only twodays after the electricity production cut off in TECOslomej, also due to defect of a cauldron pipe,although the plant`s management and ELEM hadinformed they were performing technical repairsof the equipment. These two capacities sufferedseries of defects in the past two months and lastyear which resulted into electricity productionstandstills. However, to date, no official did findnecessary to take responsibility for the bad con-dition of the equipment in these two key capaci-ties.

Vest informs about another disconnection ofthe Veles smeltery. Two days ago, MEPSO dis-connected it at the request of the State inspec-torate of the Ministry of Economy, after aninspection that established certain technicalirregularities in the two transformer stations thatsupply electricity to Veles smeltery and the facto-ry for artificial fertilizers in Zgropolci. The EnergyRegulatory Commission had also given greenlight for power supply disconnection. The Ministryof Environment appeals to conciliation.

The disconnection of the smeltery won`tcause ecological disaster, supplements UtrinskiVesnik.

2.TOP NEWS - IMPORTANCE BY NUMBER OF PUBLICATIONS

DNEVNIKp.7 THE INTEREST FOR MACEDONIAN SHARES WILL BE BACKp.7 TELEKOM OFFERS REIMBURSEMENT FOR 500 EMPLOYEDp.7 STAVRESKI AND SLAVESKI ON MEETINGS WITH THE IMF

AND WITH THE WORLD BANKUTRINSKI VESNIK

p.4 THE FAULT IN REK BITOLA IS NOT LEAVING THE COUNTRYWITHOUT ELECTRICITY

p.6 THE SMELTERY IS LEFT WITHOUT ELECTRICAL CHARGEp.7 MAKTEL OFFERS SEND-OFF REIMBURSEMENTS FOR 500

EMPLOYEES p.7 MBI 11.04.2008 p.9 THE MACEDONIAN STOCK MARKET WITHSTANDS TO THE

STRESS TESTSVECER

p.6 RUSH FOR STOCKBROKER'S LICENSEp.6 RECORD BREAKING PRICES OF THE ELECTRICITYp.6 THE APPEAL OF TELEKOM REJECTEDp.7 MEPSO DISCONNECTS THE VELES SMELTERYp.7 REIMBURSEMENT FOR 22 500 EUROS FOR OVER 25 YEARS

OF PRACTICE WORKVREME

p.6 REALIZED TURNOVER FROM AROUND THREE MILLIONS OFEUROS

p.6 TO ANNUL THE RESOLUTION FOR FISCAL RECEIPTSp.7 WE BORROW ELECTRICITY FROM GREECE AGAIN

VESTp.5 TELEKOM OFFERS 500 VOLUNTARY SACKS p.6 MEPSO DISCONNECTS THE VELES SMELTERYp.6 THE FOREIGN INVESTORS ARE STAYING WITH THE STOCK

MARKETNOVA MAKEDONIJA

p.5 900 EUROS REIMBURSEMENT FOR EACH YEAR OF WORK-ING SPAN

p.5 OIL FALLS ON WORLD MARKETS p.5 VDS MAGMA - NEW INSURANCE BROKERp.5 DEPUTY PRIME MINISTER STAVREVSKI AND MINISTER

SLAVEVSKI IN WASHINGTON p.6 FOREIGN INVESTORS REMAIN ON MACEDONIAN CAPITAL

MARKETp.6 PRICE OF ELECTRICITY REACHES RECORD BREAKING

LEVELp.6 UNI BANK WITH NON-IMPRESTED CREDIT FOR CITIZENS

SPICp.1 FAULTED TRANSFORMERS, MORE ELECTRICITYp.5 FAULTED TRANSFORMERS, MORE EXPENSIVE ELECTRICI-

TYp.5 500 EMPLOYEES WILL LEAVE FROM TELEKOMp.5 THE NEW FISCAL REGISTERS ARE WASTED MONEYp.5 TRANSPARENCY: THE ANTICORRUPTION COMMISSION IS

SELECTIVE



KAPITALPage 10 GROUP OF INVESTORS IN SMALL HYDRO-POWER

PLANTS ESTABLISHEDGroup of investors in small hydro-power plants (MHEC) was yesterday

established in the Economic Chamber of the Republic of Macedonia.

Page 10 BRITISH BUSINESSMEN DO NOT CARE IF MACEDONIAENTERS NATO

The first annual Assembly of the British Business Group (BBG), whichsends a message to British businessmen that give no importance toMacedonian failure to enter NATO, was held last week.

Page 10 MACEDONIAN HUNTING GROUND UNDER CONCESSIONThe preparation if the condition for hunting management, according to

which hunting ground will be given under concession, is in process, officialsin the Ministry of Agriculture, Forestry and Water Economy.

Page 10 AUSTRIAN GRAWE ENTERS THE REAL ESTATE BUSINESS Austrian insurance company Grawe founded real estate company in

Skopje, named Grawe Real Estate.

Page 10 VDS MAGMA - NEW INSURANCE BROKER VDS Magma Skopje is the name of the new insurance brokerage com-

pany on Macedonian market of insurance services.

Page 11 AUSTRIAN EVN FOUNDED COMPANY FOR MANAGEMENTSERVICES

Austrian group EVN founded management services company, namedEVN Macedonia Holding this week.

Page 11 LUKOIL OPENS TWO NEW GAS STATIONSRussian company Lukoil opened new gas station in Stip last week.

Page 11 MACEDONIAN WINES SUCCESSFULLY PRESENTED ONPROWIEN FAIR IN GERMANY

By the support of USAID AgBiz Program, three Macedonian wineries -Bovin, Skovin and Popova Kula, took part on the most important fair venueof wine in Europe.

Page 24 GRANIT`S SUCCESS IS MY PERSONAL CHALLENGE Straso Milkovski is one of the few managers in Macedonia, who man-

aged to make brand of the name in the public and be recognized by thename of the company they manage.

Page 31 BALANCE BETWEEN THE PROFIT AND SUSTAINABLEDEVELOPMENT

Can company from transitional emerging economy, such Macedonian,be a model to much bigger companies, from much more developed coun-tries, when it comes to application of principles of corporative social respon-sibility?

Page 32 HOW DID MAKSTIL BECOME SOCIALLY RESPONSIBLECOMPANY

The project Steel with Macedonian Sun started in 2000 in order ofincreasing of the awareness for the basic values and principles in the framesof clear environment - utility for all, and in 2001 arrives European Steel Star,promoted on the Second Working Session for Economic Reconstruction,Development and Cooperation in the frames of Stability Pact.

Page 36 GREEK VETO DEFLATES THE "BALLOON" FOR SPRINGBOOM ON MSE

In the past three months there was no investor on MSE who hoped thatMacedonian NATO invitation will be crucial for the growth of his shares.

Page 38 MACEDONIA OPENS THE SEASON OF STOCK EXCHANGEVENUES IN THE REGION!

More than 200 participants from the country and the region are expect-ed to arrive in Ohrid on the ninth in a row MSE Annual Conference.

Page 43 TOPLIFIKACIJA GAINS 19 MILLION EUROS PROFIT LASTYEAR

According to records of the financial report on last year, Toplifikacijarealized total incomes of around 33 million euros, i.e. 2,024 billion denars.

Page 43 VITAMINKA MAKES 7% EXPORT GROWTH LAST YEARFood industry Vitaminka Prilep closed last year at 7% export growth and

sell growth on domestic market of 12%, financial records on company`soperations established on its web site, shows.

Page 44 MICRO BUSINESS CREDITS FOR SMALL AND MEDIUMCOMPANIES

Recently Stopanska Banka extended its credit products with new creditline for small and medium companies.

Page 45 AUSTRIANS TO ATTACK ON THE HEALTH INSURANCEBUSINESS

Austrian Insurance Company Unica Group last week in Skopjeannounced the take over of 45.6% of the capital of Albanian InsuranceHolding Sigal, which has daughter-company in Macedonia, and practicallyentered the Macedonian market.

Page 47 TRADE DEFICIT IN THE FIRST TWO MONTHS IS 414.7 MIL-LION DOLLARS - COMPARED TO THE SAME PERIOD LAST YEAR, THEDEFICIT IS 73% HIGHER

The amount of Macedonian trade in the first two months of 2008 is42.2% higher compared to the last year trade, State Statistical Officeannounced.

Page 48 DELTA BECOMES THE MAIN PARTICIPANT ON THE REALESTATE MARKET

Following the buying of Hotel Continental and Business ApartmentsComplex for 149 million euros, Delta Company, owned by Serbian business-man Miroslav Mishkovic, announces extra investments in reconstruction ofthe hotel, which after the renovation was renamed in Crown Plaza

Page 52 IMF AND WB HAVE DIFFERENT FORECASTS ON WORLDECONOMY

The absence of strong domino effect following emerging of the financialcrisis in the developed world represents "obvious risk" compared to the pastand shows that China, India and other developing countries start to haveimportant role on the international market, Robert Zoelick, President of theWorld Bank, says.

MAKEDONSKO SONCEPage 28 AUTOMOBILE SPRING IN MACEDONIAQuite normally, in such occurrences when domestic public was legiti-

mately oriented towards politics and developments on our NATO accession(which, unfortunately, did not happened), some events emerged on econom-ic plan, which were imaginable few years ago.

FORUMPage 26 DURABLE CAPITAL FOR COMPANIESWhy companies should issue new securities, which are the acquisitions

of collecting fresh capital and what is the practice in the developed marketeconomies?

Page 29 THE BOOM IN THE CONSTRUCTION INDUSTRY IS YET TOCOME

Few days ago, Skopje old shopping center Tipo was rearranged andrenamed - City Gallery. The most meritorious man is the one who broughtmany famous world fashion brands in the country.

Page 31 PSYCHOLOGICAL BREAKDOWNMacedonian citizens will remember the first stock exchange week in

April by negative outcome following the veto on our accession in theAssembly, and participants on the capital market by the historic record break-ing fall of Macedonian stock exchange index ever since its establishment onthe 1st of January.

Page 32 THERE ARE INVESTMENTS EVEN WITHOUT NATOFailing to receive NATO invitation has no importance for the investors,

because British companies, such as Johnson Matthey, are already here.

1. SHORT REVIEW IN THE WEEKLY MAGAZINES07.04.-12.04.2008 MONDAY-SATURDAY


The members of the board of directors andthe supervisory committee of ADG Mavrovo-Skopje, who are owners of ordinary sharesissued by the company, are planning to acceptthe offer for purchase of ordinary shares madeby the Croatian company Ingra, considering theexperience and the business situation of the bid-der, which derives from working in similar fields,the proposed development strategy and thefinancial potential of the bidder.

As it is mentioned in the Argument publishedon the website of the Macedonian StockExchange, an opinion regarding the Offer forpurchase of ordinary shares was adopted on thesession of the board of directors, held on07.04.2008. The board of directors of ADGMavrovo from Skopje confirms that negotiationswith Ingra from Zagreb were led, regarding thesubmission of offer for purchase of 154,210 ordi-nary shares issued by ADG Mavrovo. The bidderIngra submitted an intention for purchase of ordi-nary shares issued by ADG Mavrovo. The legal-ly projected documentation for submission of arequest to the Securities and ExchangeCommission of the Republic of Macedonia forissuing of a permit for purchase offer was pre-pared in the legally projected deadline. Afterobtaining of Solution from the Securities andExchange Commission of the Republic ofMacedonia, with which, Ingra is allowed to sub-mit an offer for purchase of securities, the

Prospect for purchase of ordinary shares issuedby ADG Mavrovo - Skopje was submitted to theboard of directors of Mavrovo.

Before initiating of the procedure for takingover of ADG Mavrovo, in accordance with theLaw on taking over Joint Stock Companies, thebidder Ingra purchased 56,802 shares, whichrepresent 26.92% of the total number of issuedshares by Mavrovo-Skopje, with which, the bid-der practices the right of securities in accor-dance with the Statute of ADG Mavrovo and theLaw on Trade Companies. The board of directorsof ADG Mavrovo supports the bidder Ingra in theintention for taking over of the company and itfeels that the successful realization of the offerfor purchase will have a positive effect on theinterests of ADG Mavrovo and only positiveimplication over the employees in terms of theirpersonal improving. The strategic plans of Ingraabout ADG Mavrovo are in a direction of devel-opment of the company and enlargement of thecurrent business activities.

According to the recent audited report ofADG Mavrovo-Skopje, in 2006, the companyrealized incomes from constructive works andother incomes in the amount of 2,092,372,000denars and outcomes of constructive and otheroperative outcomes in the amount of2,086,596,000 denars, leaving the company witha profit of 5,776,000 denars.

The audit of the financial reports was carried

out by Macedonian Audit Center LTD and thesame refrained from an opinion for the consoli-dated financial reports of the group ADGMavrovo.

The total assets in 2006 were 3,875,292,000denars. The total shareholders' capital andreserves was 648,141,000 denars.

The accumulated loss was in the amount of150,660,000 denars, wherewith the total equityof the company was in the amount of497,481,000 denars. The bookkeeping value ofordinary voting shares from 31.12.2006 was2,358 denars per share.

The visit of International Monetary Fund'smission, energy and foreign investors are thesectors in the country which, because of theevents that were going on in them, were in thefocus of the print media's interest.

The papers reported that monetary expertscommended the economic growth and theprogress of Macedonia, but also that they rec-ommended increase of interest rates and limit-ed spending of the budget. They think that tostop inflation the measures the monetary policytook were not enough, but that the Governmenttoo should intervene with the fiscal policy. IMFfinds it incomprehensive how the country canpay the companies' the expensive electricityimport. Electricity price is among the lowest inthe region, and the expenses for its import thisyear will most probably be much bigger than itwas planned. This leads to increase of thefinancial losses, because of what theGovernment has to react with the fiscal policyand, the Central bank with the monetary instru-ments to stop the further prices increase. Withinthe IMF's visit was also the stay of Josef Breda,university professor from the USA, who thinksthat the oil price increase on the world's stockmarkets is one of the reasons because of whichthe Government cannot save us from inflation.The American professor, who is also advisor ofFinance Minister Trajko Slaveski, thinks that notgetting an invitation for NATO membership willhave no consequences for Macedonian econo-my nor will negatively affect the foreign direct

investments. The confirmation for this opinion came very

quickly. On the first Macedonian Conference forSuppliers and Investments, organized by thiscorporation, the Government and USA andGreat Britain's embassies, deputy-president ofthe Board of Directors of General Dynamics,Nick Fermor, said that big multinational compa-nies need real partnerships with companiesfrom countries like Macedonia in order to sup-port the wider economic growth. Minister VeleSamak pointed out that in our engagement forattracting foreign investments, -we strive inattracting the biggest production and servicecompanies. General Dynamics is one of thefour biggest defense industries in the world,and it also has commercial aspects. In their visitof Macedonia they saw the long-term interestwith us, so we had mutual activity as to how tofind a way to strengthen Macedonian economy,together with their investment plans. We sawmutual interest for mutual promotion, in order tofind solutions both for General Dynamics andMacedonia.

From the investment sector among themost covered was the opening of distributioncenter of Slovenian pharmaceutical companyKrka, which with its line of 120 medicines pres-ent in the country, collects about 10 millioneuros yearly.

Although it announced tender on coal sup-ply for the thermal power stations Oslomej andBitola, ELEM gave up the election of mostfavorable offer. According to them, the reasonwas that the import would cause increase of theelectricity price for the households, whileaccording to some papers canceling the tenderwas due to the reason that the company thatwas favored to winning the tender didn't offerlowest price for ton of coal. At the same time,within only two days, both thermal power sta-tions went out of the electro-energetic system.Officially, Oslomej was shut down because ofpreparations for the regular annual May repair,and REK Bitola because of defect, which isexpected to be repaired as soon as possible…This week was formed the Group of investors ofsmall hydroelectric power plants, through whichwill operate the companies that received loca-tions for construction of small power stations onthe first tender.

Among the top news this week was also thenews that Croatian Ingra became owner of thedominant share package of construction com-pany Mavrovo.

The new owners will continue purchasingshares as long as there are interested share-holders who want to sell their securities.

PAST WEEK IN THE TOKEN OF...

Macedonia is good chance for foreign investors

The acquisition of Mavrovo by the Croatiancompany Ingra is at its end

New members of the Stockmarket exchangeTwo other members have joined the

Macedonian stock exchange. The terms formembership in accordance with the Principlesof membership in the Macedonian StockExchange AD Skopje had fulfilled the broker-age firms MOJ BROKER AD SKOPJE andPEON BROKER AD SKOPJE, which, onbasis of the decisions for starting using theprinciples for membership in the stockexchange, will start trading on 8 April the fol-lowing year. The brokerage firm MOJ BRO-KER AD Skopje will trade through the BESTsystem under the code MO, while the broker-age firm PEON BROKER AD SKOPJE willstart trading through BEST system under thecode PE.


W E E K LY R E V I E W O F M A C E D O N I A N S T O C K E X C H A N G Eperiod 07.04. - 11.04.2008

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