Firms reluctant to generate capital from stock issues.

Only two companies chose this way last year to garner financial means. Even though the crisis has driven up the rates of bank loans as one of the most appealing sources for funding projects, firms still trust bank loans most. According to the survey results, the number of companies not knowing the negative aspects of taking loans, such as the risk of interest rate alteration, the risk of denar exchange rate alteration, and the size of the one-time fees and commissions, is alarming.

Few and far between are the companies that decide to generate capital by issuing shares. Although in the course of last year the value of the generated capital increased, only two companies picked this way to get to finances.

According to the report of the Securities and Exchange Commission, only the building firm Beton and the winery Tikves issued stocks worth 708.9 million denars last year, which drove up the value of the issues by 4.3 times relative to 2007, when stock issues totaled 163.7 million denars.

Most issues of shares occurred in insurance companies (as many as 12), and four issues each took place in banks and other financial institutions. Although the crisis has driven up the rates of bank loans as one of the most appealing sources for funding projects, firms still trust bank loans most.

Issuing shares is still not a very appealing option to firms although according to surveys they are aware of this means of collecting capital. According to the study "Mobilizing Capital by Isuing Securities (a Real Possibility or an Illusion)" by Janka Dimitrova, director of the brokerage house Idea Plus Broker of Radovis, as much as 65 percent of the stock holding companies are aware of the possibility of issuing securities, 39 percent know the benefits of stock issue and 48 percent are willing to make a new issue of securities. The survey was conducted in 85 firms in eastern and southeastern Macedonia and showed that although aware of the possibilities for transformation into stock holding companies and tapping the benefits of issuing securities, limited liability firms are nevertheless reluctant to transform.

Also, sixty-one percent of the stock holding companies have so far used borrowed money, 78 percent plan capital investments in the coming period, and 22 percent are not familiar enough with the shortcomings of borrowing money. Seventy-one percent of the limited liability firms have so far borrowed money, 71 percent plan capital investments in the coming period, and 30 percent are not familiar enough with the negative aspects of taking loans.

According to the survey results, the number of companies not knowing the negative aspects of taking loans, such as the risk of interest rate alteration, the risk of denar exchange rate alteration, and the size of the one-time fees and commissions, is alarming.