MONTENEGRO IN 2008 AT A GLANCE

JANUARY:

- Montenegro ranked a consortium of Channel Islands-registered C&S.I and Mercury Distribution as the best bidder for its entire 61.57% stake in its biggest ship repairer Jadransko Brodogradiliste Bijela. The top bidder had offered to pay 7.1 million euro ($10.1 million) for the state-owned stake and to invest a further 40 million euro in the shipyard. The offer also includes 1.62 million euro of investments in environment protection.

- Montenegro said Germany's Westdeutsche Allgemeine Zeitung (WAZ) media group showed interest in the tender for the sale of 51% of the publisher of Montenegrin daily newspaper Pobjeda.

- International rating agency Standard & Poor's (S&P) affirmed Montenegro's 'BB+' long-term and 'B' short-term sovereign credit ratings on good fiscal performance and prudent economic growth. The outlook remained stable. A couple of days later the International Monetary Fund (IMF) called on Montenegro to prevent overheating of its economy with the inflation picking up, large wage increases weakening competitiveness and rapid credit growth overstretching banks' risk assessment capabilities.

- Prime Minister Zeljko Sturanovic resigned for health reasons after his doctors recommended he reduce his workload. Sturanovic, aged 48, announced in January 2007 he has a lung tumour.

FEBRUARY:

- U.S.-based real estate services company Colliers International opened an office in Montenegro.

- Montenegro invited investors to express interest in developing an upscale resort on a fifth of the country’s Adriatic island Ada Bojana.

- Montenegro said it is seeking investors to develop and manage an exclusive resort on scenic Mount Durmitor.

- President Filip Vujanovic gave ex-prime minister Milo Djukanovic a mandate to form a new government.

MARCH:

- The parliament agreed that Djukanovic head the Montenegrin government after Zeljko Sturanovic resigned as prime minister in January. Djukanovic proposed that the ministers in the cabinet of his predecessor keep their positions.

- A tender for a 51% state stake in Montenegrin newspaper publishing company Pobjeda failed to attract bidders by the March 4 deadline.

- International credit rating agency Moody's assigned its first ever sovereign ratings to Montenegro. A Baa1 country ceiling for long-term foreign currency debt and a Ba2 issuer rating for the foreign currency debt obligations of the government of Montenegro were assigned.

- Montenegro Stock Exchange launched a one million euro takeover bid for the country's other bourse, NEX Montenegro. The takeover bid aims to drown the initiative for unification of the Montenegrin capital market, NEX’s then CEO, Dragan Djukic said.

APRIL:

- NATO decided to put Balkan neighbours Bosnia and Montenegro on track to membership after inviting Albania and Croatia to join the alliance.

- Montenegro’s incumbent head of state Filip Vujanovic has won a second term of office with 51.4% of the vote in the presidential elections.

- S&P revised its outlook on Montenegro to negative from stable on the back of rising macroeconomic imbalances. It affirmed the 'BB+' long-term and 'B' short-term sovereign credit ratings, as well as the 'AAA' transfer and convertibility assessment. "The outlook revision reflects rising macroeconomic imbalances, with Montenegro recording a very high current account deficit of 44% of GDP in 2007," S&P said.

- Montenegro's state-run power utility company Elektroprivreda Crne Gore, EPCG, launched a restructuring process, according to which it will be split into five new companies in charge of production, transmission, distribution, supply and construction works.

MAY:

- Montenegro said nine international companies have shown interest in developing an upscale resort on Montenegro's Adriatic island of Ada Bojana.

- Montenegro has decided to delay its application for European Union candidate status until autumn. The country had initially planned to file its application by the end of June. Montenegro's prospects of joining the EU were boosted in October 2007 when the country signed a Stabilisation and Association Agreement (SAA) with the EU. The Adriatic republic decided in a 2006 referendum to restore its independence and broke its loose union with Serbia that replaced rump Yugoslavia in 2001.

JUNE:

- The takeover bid of Montenegro Stock Exchange for the country's other bourse, NEX Montenegro, failed.

- Montenegro opened a prequalification tender for the construction of a 2.0 billion euro motorway that will link the country with a major EU-defined transport corridor.

- Montenegro's budget surplus nearly doubled to 172.94 million euro in 2007, preliminary data from the Finance Ministry showed.

- Magyar Telekom's Montenegrin unit, Crnogorski Telekom, proposed to pay as dividend 22 million euro of its 23.6 million euro net profit for 2007. It is the highest dividend a company in Montenegro has ever distributed.

- A second attempt by the state to sell its majority stake in ship repairer Jadransko Brodogradiliste Bijela failed as the top ranked bidder in the tender, Channel Islands-registered C&S.I and Mercury Distribution, and the second-ranked bidder, a consortium of Russian repairer of mine sweepers Avangard Shipyard and Avangard Bank, withdrew from the sales talks.

- Four international companies have shown interest in the development of tourism company Velika Plaza where investments in the project can exceed one billion euro.

- Serbian-based holding company Atlas Group bought for 25 million euro in cash and 120 million euro of investments Montenegrin military medical centre Meljine, near the coastal town of Herceg Novi.

JULY:

- Fox TV, owned by Rupert Murdoch's U.S. media conglomerate News Corporation, decided to quit its broadcasting rights in Montenegro on economic concerns.

- Montenegro has licensed its first privately held pension fund, Penzija Plus, managed by Atlas Penzija. The tiny Adriatic country of some 620,000 people ran up to then a one-tier pension system, under which employees contribute their pension insurance payments to a government-managed fund. There are no private mandatory funds, or a second tier, in the country. Voluntary pension funds will constitute the third tier of the pension system.

AUGUST:

- S&P categorised Montenegro’s banking industry in the second highest group in its Banking Industry Country Risk Assessment (BICRA). This category reflects Montenegro's (BB+/Negative/B) high economic risk, very high credit risks exacerbated by dramatic loan growth of the past three years, it said. Montenegro’s eleven active banks are all privately held.

- Nordic Stock Exchange, OMX, and Vienna Stock Exchange showed interest in acquiring stakes in New Securities Exchange (NEX) Montenegro, the Montenegrin bourse said.

SEPTEMBER:

- The Zagreb Stock Exchange (ZSE) has launched talks to acquire a stake in one of the two Montenegrin bourses, NEX Montenegro, a NEX shareholder said.

- Montenegro has ranked Croatia’s Unicredit Markets & Investment Banking - Zagrebacka Banka first in a tender for advisor on the planned sale of a 22% stake in Montenegro’s power utility EPCG. The government plans to increase the company’s capital by offering a 300 million euro new share issue to a strategic investor. The company’s capital stands at 992 million euro at present. Following the hike, the state stake will be cut to 55% from 70.6% and the balance will remain in the hands of small shareholders.

- Demand for real estate at Montenegro's Adriatic coast is expected to fall or stall at its current levels next year suppressed by the global financial crisis, increased interest rates and inflated property prices, the country’s central bank said.

- Montenegro, which relies heavily on electricity imports to satisfy its domestic needs, awarded eight design, build, operate and transfer (DBOT) concession contracts for small hydropower plants aiming to cut import costs over the long term, the government said. Montenegro imports over a third of it’s annual power consumption, which exceeds four billion kilowatt hours.

OCTOBER:

- Serbia’s Delta Real Estate opened the first international-style shopping mall in Montenegro in which investments total 72 million euro.

- Six international companies qualified to take part in a tender for designing, financing, constructing, managing and maintaining a 2.0 billion euro motorway that will link the country with a major EU-defined transport corridor. These are: Alpine Consortium (made of Austria’s Alpine Bau and PORR Solutions Immobilien und Infrastrukturprojekte and Croatia’s Osijek-Koteks); Aktor Consortium (composed of Aktor Concessions and Aktor, both from Greece); Bouygues Consortium (comprising France’s Bouygues Travaux Publics and DTP Terrassement and Hungary’s Intertoll-Europe Zrt); Konstruktor Consortium (made up of Croatia’s Konstruktor- inzenjering, Institut Gradevinarstva Hrvatske and Tehnika); Austria’s Strabag and Israel’s Housing & Construction Holding Co.

- Some 34 people were injured and 28 arrested in a protest rally in the Montenegrin capital Podgorica against the government’s recognition of neighbouring Kosovo as independent from Serbia. Some 32% of Montenegro’s population is ethnic Serbs, 2003 data of the statistics office shows. Some 5.0% of Montenegro’s 620,000 citizens are ethnic Albanians.

- Montenegro hired Croatia’s UniCredit Markets & Investment Banking - Zagrebacka Banka to advise on the planned sale of a 22% stake in the country’s power utility EPCG.
- Montenegro's government approved a set of measures to fully protect deposits in local banks, aiming to calm investors amid a deepening global financial crisis.

- Montenegro’s opposition called for a referendum in December to ask the people whether they approve of the recent recognition of Kosovo's independence by the government.

- Vienna-based Ost Holding, which is fully-owned by German media group Westdeutsche Allgemeine Zeitung (WAZ), filed the sole bid in a tender for a 51% state stake in Montenegrin newspaper publishing company Pobjeda. The agency opened the tender in July after a previous attempt failed to attract any interest earlier in the year.

- Montenegro invited bidders to design and construct four small hydropower plants with a total installed capacity of 238 megawatts on the Moraca River.

- The Montenegrin government adopted a 1.391 billion euro energy strategy until the end of 2012, which aims to boost the electricity output and develop the renewable energy potential of the imports-dependent country.

NOVEMBER:

- The Finance Ministry said the Montenegrin economy is expected to grow by a real 7.0% in 2009, while inflation is seen slowing down to 4.5%. The GDP grew by a real 8.0% in the first nine months of 2008, above the government's target of 7.0%. Consumer prices grew by 6.5% in September compared to December 2007.

- S&P affirmed Montenegro's 'BB+' long-term and 'B' short-term sovereign credit ratings on healthy budgetary policy and use of the euro as domestic currency but said the country’s outlook remained negative due to high external imbalances.

- Montenegro launched its third attempt to sell its 61.57% stake in the country's biggest ship repairer Jadransko Brodogradiliste Bijela.

- Montenegro’s aluminium giant KAP will cut its output next year to cope with a swelling loss due to high production costs and low metal prices, fuelled by the global crisis, KAP’s board chairman Kaha Avaliani said. KAP’s operating loss was $38 million for the first ten months of the year. KAP produces around 15% of the country's GDP and analysts fear any tribulations in its operations may seriously hit the Montenegrin economy.

DECEMBER:

- Twenty international companies and consortia have expressed interest in designing and building four small hydropower plants with a total installed capacity of 238 megawatts on the Moraca River.

- The Montenegrin government approved a 44 million euro three-month loan to help Prva Banka overcome a liquidity shortage. Businessman Aco Djukanovic, brother of Prime Minister Milo Djukanovic, is the largest shareholder in the bank, with a some 46% stake.

- Montenegro applied for membership in the European Union, reaching a historical milestone, EU Enlargement Commissioner Olli Rehn said.

- Montenegro’s economic growth will slow down to around 2.0% in each of the next two years as the global outlook dims, the IMF said.

- Moody's changed the outlook on Montenegro’s Ba2 foreign currency bond rating to negative from stable. The global credit crunch has reduced liquidity in the banking system, the collapse of aluminum prices is threatening the viability of the country's largest exporter, KAP, and the termination of the international property boom will lead to a sharp deceleration in foreign direct investment, it said.

- Montenegro extended by 45 days the bidding deadline in the tender for designing, financing, constructing, managing and maintaining a 2.0 billion euro motorway that will link the country with a major EU-defined transport corridor. The new deadline is set for March 2 as the global financial crisis has significantly influenced commercial banks' readiness to provide co-financing of the motorway project and most of the pre-qualified bidders have expressed concern they will not be able to meet the initial January 15 deadline.

- Montenegro’s troubled aluminium giant KAP, controlled by Russian tycoon Oleg Deripaska, will cease operations by February unless it receives help from the government in Podgorica, KAP CEO Viacheslav Krylov said.

- The Montenegrin government has revised down to a real 5.0% the forecast for the country’s economic growth in 2009 from the earlier projection of 7.0%, a government official said.