In the 1990s, there was a bloody conflict in Bosnia and Herzegovina, a country in central-eastern Europe formally part of Yugoslavia, a communist state encompassing nearby countries. It was Europe’s bloodiest conflict since World War II. The conflict ended with a power-sharing agreement of semi-autonomous states and leadership spread between the three main ethnic groups : Serbs, Croats and Bosniaks. Now it seems to be failling apart. It comes down to one man, Milorad Dodik, president of Republika Srpska, the Serb-dominated part of the country. He is stirring up old nationalist thinking, and according to CBS “had the Serb parliament pass laws that enable the theoretical withdrawal of the Republika Srpska from the combined military of Bosnia and Herzegovina, and from the judicial and tax systems of the federation.” It also reported that Bosnia’s defence chief says U.S. troops are needed to hold the country together.
Possible seccession and armed conflict could negatively affect stocks that have business in Bosnia and Herzegovina, namely in Sarajevo (the Serb army once sieged it in the Siege of Sarajevo) and Serb-dominated cities like Banja Luka. Sarajevo Stock Exchange or SASE is a stock exchange with a market cap of US$ 3.34 billion (April 2019). It could see the Sarajevo Stock Exchange Index 10 (SASX-10) go down in price, which holds the top 10 companies in the country. Anyways we’ll see how this all plays out.
Devlin Demontigny 