MACEDONIAN STOCK MARKET EXCHANGE SUPPLY CHARACTERISTICS

Abstract

Financial development is fundamental for the country's economic growth. An important question related
to financial depth is the development of the stock market exchange and banking sector. A quick overview of the data
and literature shows how the banking sector is dominant in the developing and Emerging market country's financial
industry. Furthermore, the financial depth measured with credit to GDP and stock market exchange capitalization to
GDP ratios differs significantly among countries. On average, the stock market exchange capitalization of listed
companies in emerging markets is below 10% of GDP. In contrast, developed countries have a stock market
exchange capitalization of more than twice their annual GDP.
A developed capital market’s role in promoting economic growth is highly imperious to all countries, North
Macedonia inclusive. Given the previous, this study examines the characteristics of the North Macedonia stock
market exchange supply, using secondary data covering the period of 2012 to 2022. The methodological approach
combines several research methods – analysis, induction, deduction, synthesis, selection, and comparison. Findings
reveal the existence of low market supply due to the small number of securities in everyday trading. From the
analysis, the Macedonian stock exchange supply consists of five company shares with more than 80% of the total
annual turnover. In distinction, the top 3 traded companies contribute to the total market turnover by more than 60%.
More so, the Macedonian stock market exchange is not recognized to provide long-term public financing for any
company.
The results suggest little commitment from the Macedonian market participant, especially economic policies
regarding national capital market development. Policies can start with empowering the national strategy for capital
market development and the recent proactive approach of the Security regulatory agencies and Macedonian stock
market exchange. The paper briefly reviews the main policy recommendations for boosting the securities supply.
Those efforts have prospects of raising the market capitalization to GDP ratio of its todays around 20%.
With an analysis of the Macedonian stock market exchange and policy actions, the paper's conclusions are regarding
policy recommendations for overcoming the challenges for stock market exchange supply development. The first
step is to start with the implementation of the National Strategy for Capital Market Development. Second, market
participants should do more activities regarding the company's management attitudes towards going in public and
listing their companies. Third, there is more room for financial education in capital market principles. Finally, the
paper gives a solid basis for further research.