Belgrade Stock Exchange: We are protected from dramatic breakdowns of the capital market
– We have in-built price amortization mechanisms, which are self-activated and require no human intervention, so that big and sudden disruptions would not happen, such as a drastic drop or growth of the price of shares, which has a negative impact on the operations of the stock exchange – Krneta told Beta.
He specified that the Belgrade Stock Exchange had installed an automatic mechanism, which prevents drastic drops or increases in share prices in the course of a day.
According to him, the mechanism consists of a combined model of static and absolute zone of price fluctuation.
– When the pre-set percentage of price deviation is reached, the static zone of fluctuation is first activated, which stops the trade process at the stock exchange for a while automatically, without human intervention – Krneta said.
As he explained, if the trend of the great oscillation of prices continues, the mechanism of the absolute zone of fluctuation is activated, which doesn't stop the trade, but prevents a further drop in share prices for that trading day.
– In such crises, the existence of this mechanism enables an unobstructed functioning of an underdeveloped capital market, such as the one in Serbia – said the director of the Belgrade Stock Exchange.
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