A month before the International investor conference and the meeting of the European Federation of Investors and the Financial Services Users (BETTER FINANCE) and the World Federation of Investors (WFI) in Slovenia, the Slovenian Press Agency (STA) published an interview with the VZMD President, mag. Kristjan Verbič. In it, mag. Verbič touches on the main topics of the upcoming conference of the “European Capital Markets for Individual Investors” which is being organized by the VZMD together with BETTER FINANCE and is to take place in September in Bled. The entire interview is published below.
The interview with the VZMD President was conducted by Jure Bernard. Photo and text: STA.
It would be useful for the Slovenian and European economy if people who have savings deposited in banks were encouraged to invest in the capital market, says Kristjan Verbič, the head of the VZMD association of small shareholders. To do that, the state should crate adequate conditions.
This will be the main topic of a conference the PanSlovenian Shareholders' Association (VZMD) and Better Finance - the European Federation of Investors and Financial Services Users will organise in Bled between 11 and 14 September.
People in Slovenia, who have around 24 billion euro in bank deposits, should be encouraged to invest in the capital market, which would benefit them and the entire community, Verbič told the STA. "We see a lot of room for this plus a lot of overall positive effects for the economy."
A key focus will be on "finally getting our decision-makers to convince people to significantly contribute to the development of much needed infrastructure projects and of companies via the capital market".
Verbič singled out bonds with guaranteed yields that small shareholders could buy to finance large infrastructure projects.
The Ljubljana Stock Exchange should meanwhile encourage companies such as startups and family businesses to get the needed capital on the stock market.
One way to do that would be to put in place a tax exemption for profit from the sale of the securities of a listed domestic company if proceeds are reinvested in the securities of another domestic company.
"This would improve liquidity of the capital market, prices of securities would rise, while ownership of securities and adequate yields would be guaranteed," he said.
The state should also encourage investment for old age, education of children and for the event of health problems.
What is more, company owners who find "payment of dividends as something undesirable and morally unacceptable because one should instead invest in development" should change their mindset. "This is a flawed logic," believes Verbič.
While pointing to trust as a key factor in deciding to invest in the capital market, Verbič believes it has been squandered, probably on purpose.
He highlighted the case of NKBM bank privatisation and the subsequent erasure of junior bondholders as part of the 2013 bank bailout in Slovenia. "It is high time for political will to be found for a settlement."
High costs of securities ownership is another obstacle to more investment by small shareholders, he said.
The cost of having a trading account is high, "which is short-sighted and is directed towards having only big players on the stock market".
The VZMD is also making an effort to have equal conditions for changing one's stock broker, as the cost of leaving can exceed the value of one's portfolio.
The VZMD is thus pushing for an arrangement similar to that applying to changing one's telecommunications provider or electricity supplier, which is free of charge.
At the Bled conference, investment opportunities will be presented by the country's bad bank BAMC and the SPIRIT agency, and Equinox, the first real estate fund in Slovenia. Pension investments in Europe will also be discussed.