Serbia’s Ministry of Finance and Brussels-based international depository clearing company Euroclear have signed an agreement that defines the conditions for cooperation regarding inclusion of Serbian securities in the Euroclear system which would help lure international investment into the Balkan country’s bond market.
The “Euroclearable” -or clearable through the Euroclear international settlements system- link will allow foreign investors to access the Serbian domestic market in a more secure and standardised way, resulting in a lower cost of borrowing, increased liquidity and greater market stability.
“Connecting to the Euroclear platform will facilitate new investment in government securities issued in local currency. It will also have a positive effect on the further development of money and capital markets in Serbia, and will lead to a reduction in financing costs. On top of facilitating new investments, it will also attract a completely new profile of investors to the Serbian market. In December 2021, a new, systematic law on the capital markets was adopted, which should contribute to the creation of a more transparent and secure market” Sinisa Mali, Serbia’s Minister of Finance stated.
For his part, Sudip Chatterjee, Head of Global Capital Markets, Euroclear commented: “We are extremely pleased to move into this next phase with the Serbian Ministry of Finance in our journey to make the market Euroclearable. By working together to bring resilience and international standards to the Serbian capital market, we will be able to deliver improved liquidity, cost efficiencies and international investment.”
Euroclear provides settlement and custody of domestic and cross-border securities for bonds, equities and derivatives to investment funds. The Euroclear group comprises Euroclear Bank, the International CSD, as well as Euroclear Belgium, Finland, France, Nederland, Sweden and UK & International.
The Euroclear group settled the equivalent of EUR 897 trillion in securities transactions in 2020, representing 276 million domestic and cross-border transactions, and held EUR 35.2 trillion in assets for clients by end June 2021.
Last month, Euronext CEO Stéphane Boujnah in an interview with Bloomberg hinted the Paneuropean exchange is eyeing Euroclear as the next phase of its acquisition spree. Boujnah said Euronext is watching the securities settlement and asset servicing business with “a lot of interest” adding Euroclear would be a “natural fit” as it looks to increase its footprint in the European market. Amsterdam-headquartered Euronext currently has a 3.34% stake in Euroclear, making it the company’s eighth-largest shareholder.
