"InterCapital Securities" – first market maker on the Belgrade Stock Exchange

- “InterCapital Securities“ is the first broker company that accepted the Belgrade Stock Exchange’s terms for market making activities - Serbian Capital Market announced today (December 4, 2008).

The Belgrade-based broker accepted the role of market maker for the stocks of Tigar [TIGR], the first securities in Prime Market of the Stock Exchange, which means that it is now obliged to contribute to the growth of liquidity and turnover of stocks of the Pirot-based corporation through simultaneous delivery of purchase and selling orders.

Through simultaneous and continuous issuing of purchase and selling orders, in accordance with the liquidity level of the securities, the market makers act as a special trade catalyst.

In that way, according the announcement, the market markets contribute to the growth of liquidity of certain securities by increasing turnover and reducing fluctuations of the stock price.

It is pointed out in the announcement that is published on the website of the Stock Exchange that these actions are useful for all individual participants in the market, as well as for the market as a whole.

Thanks to the presence of market makers, the investors can be sure that someone will always be present on the opposite side, especially when having in mind the fact that there can be several market makers for one type of securities.

The motive for some company to become a market maker lies in the opportunity for achievement of profit through difference between the purchase price and the selling price. Maximum allowed range of the price is limited by the Stock Exchange’s liquidity levels.

The existence of market makers is good for issuers of securities because their activities enable determination of large number of referential prices for securities during their trading. In that way, the market value of some stock is placed at fair representative level.

Also, the increased frequency of trade reduces fluctuations of the stock price, that is, it reduces daily oscillations.