But this salvage mission seems unlikely to succeed on some of the stock markets in the region.
The global market turmoil took its toll on the SEE bourses last year with the exodus of foreign investors dragging down some of the indices to their values of a few years ago. After hefty gains in 2007, most SEE share indices lost about two-thirds of their value last year.
Foreign investors are not expected back in the region before global markets recover, therefore, bourses where domestic investors are more active will rebound first, analysts said.
Darko Kovacic from Maribor-based Raiffeisen Banka said the Slovenian equity market is likely to be the first one to recover in SEE, maybe in the second half of the year, because domestic investors are usually the main players on it and the role of foreign investors is limited.
“Other markets, like the Serbian and the Macedonian ones, will rebound later,” Kovacic told SeeNews. He added that foreign investors play a bigger role on the Serbian and the Macedonian markets than in Slovenia.
Many foreign investors left the Serbian market last year as they had problems on their own markets and lost a lot of money, said Danko Knezevic, a broker with Serbia's Delta brokerage.
“Everyone only hopes the crisis will come to an end and things will slowly get better,” Knezevic told SeeNews. “It doesn’t help any more whether we’ll join the EU, or whether some company will show much better results, or if the dinar [currency] will stabilize.”
Serbia’s Prime Minister Mirko Cvetkovic said last month that the country will apply for EU candidate status in April.
“What will happen this year depends entirely on the return of foreign capital but things have to normalize on their markets first. So, it is a vicious circle,” Knezevic said.
“It is all about someone bringing money and investing it on the bourse. But because the real sector suffers lack of liquidity and money should be pumped into the real sector first of all, just after that we can expect this money to go to the bourse,” he added.
Julijana Angelovska from Macedonia's Alta Vista Broker said the blue-chip index of the Skopje bourse has probably reached a bottom and stabilization is expected, but no one can predict the further market developments due to the consistently negative projections for the country's economy as a whole.
All gloomy prognoses, psychological factors, the global economic turmoil make people hold their money and nobody dares to invest on the bourse, Angelovska said. The Macedonian market is thin, but some upward trends in share prices and market liquidity can be expected, she added, avoiding to give more detailed forecasts.
The two bourses in Bosnia and Herzegovina, in Sarajevo and Banja Luka, plan to focus on attracting local investors.
The executive director for trading and supervision of the Sarajevo bourse, Almir Mirica, said that local investors now hold most of their savings in bank deposits as the downfall of the equity markets in 2008 scared many of them away.
“However, we believe that the issuance of securities by financially healthy and well-known companies will attract them to the market, this time with a more cautious approach and a very thorough research of the companies' value," Mirica told SeeNews.
He expects a slow recovery of the most liquid shares on the Sarajevo bourse this year.
Milan Bozic, director of the Banja Luka bourse, said the return of local investors is the most important challenge for the stock markets in the region. He expects stabilization of the local market and a gradual recovery in the spring, but added that the improvement will most of all depend on the capability of the most developed countries to reverse the negative trend in the world economy.
Boris Bonkin, head of the asset management department of Allianz Bulgaria Pension Fund Management Co., thinks global markets currently are more attractive and have a higher potential for growth this year than the Sofia bourse.
Foreign investors do not want to take risks now and the Bulgarian market ranks among the risky ones, Bonkin said. Only after international markets normalize, investors will turn their eyes to Bulgaria, he added.
Bonkin also said local investors are not big players on the Bulgarian market in general and he does not believe they will be able to provide a sustained lift to the market. “I expect the Bulgarian market to start stabilizing and recovering in 2010-2011,” he added.
On the Bucharest Stock Exchange in neighbouring Romania, where foreign investors used to prevail, expectations for the share price movements are negative, at least for the first half of the year, said Radu Popescu-Buzeu, head of research at Romania’s Tailwind Securities.
“The Romanain capital market will be among the last that will begin to recover […] the state of international economy will be the most important factor," Popescu-Buzeu said, adding that only the end of the global crisis can bring foreign investors back.
He added he did not expect local investors to be more active in 2009 than they were last year. This year, Romanian stocks will be unable to recover the heavy losses they suffered in 2008, he added.
(SeeNews reporters Velizar Velikov, Sabina Kotova, Iskra Pavlova, Valentina Dimitrievska and Stefan Ralchev contributed to this analysis)
