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Serbian capital market joins Clearstream opening up to foreign investors

posted onOctober 5, 2021

Serbia's capital market on Monday (Oct. 4) joined Luxembourg-headquartered Clearstream, the international central securities depository (ICSD) of Deutsche Börse Group. 

Clearstream is the first ICSD to offer international investors seamless access to the Serbian capital market by enabling settlement of Serbian government bonds denominated in Serbian Dinar (RSD). This step aims to attract cross-border investments and thereby improve liquidity in the domestic capital market. 

The linkage comes following the recent inclusion of Serbia’s dinar-denominated bonds in a series of major local-currency emerging markets indices, such as J.P. Morgan’s Government Bond Index-Emerging Markets (GBI-EM) and their Government Bond Index-Aggregate (GBI-AGG). This step triggered a significant increase in turnover on the secondary market as well as an arrival of new buyers of related bonds and foreign investment funds. The inclusion pays testament to the strengthening of the domestic macroeconomic environment in Serbia and years long efforts to develop the local financial market. 

The Republic of Serbia’s Ministry of Finance welcomed Clearstream in opening its new link to the Serbian capital market. It expects this step to create strong links with global depository centres to introduce advanced services for market participants, as well as to facilitate the access for international investors to the Serbian capital market, while strengthening bridges between local issuers and international investors. 

Vienna-listed Raiffeisen Bank International will act as local custodian and operator of Clearstream’s account at the Serbian central securities depository (CSD). 

This cross-border link creates various new investment and financing opportunities for the domestic market, underpinning our commitment to connect capital markets all over the world” Jan Willems, Head of Global Markets at Clearstream, said in a statement.

Other emerging Europe markets that joined Clearstream saw a strong upturn in investment into their domestic debt, according to bne IntelliNews. 

Clearstream provides the post-trade infrastructure for the Eurobond market and services for securities from 59 domestic markets worldwide. With 16 trillion Euros in assets under custody, Clearstream is one of the world’s largest settlement and custody firms for domestic and international securities. 

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