BELGRADE (Reuters) – Serbia’s central bank yesterday decided to cap the exposure of pension funds to risky equity investment, giving them until April 2008 to reduce their portfolio of unlisted shares to 10 percent from a current 30 percent. The investments in unlisted assets will be cut gradually, to 20 percent at the end of 2007, 15 percent by March 2008 and to 10 percent in April 2008, the central bank said in a decision due to be published in the government’s Official Gazette. But the bank, supervising the nascent pension fund industry, allowed them to boost total investment in shares to a total of 40 percent of their portfolio. Another 10 percent of the total portfolio may be kept in foreign equity issued by the Organization for Economic Cooperation and Development member states. «The reason to tighten criteria is to protect the funds from risks and encourage them to diversify. But we also believe this decision will encourage more companies to list,» a central bank source told Reuters. Tire maker Tigar Pirot is the only listed company trading on the Belgrade Stock Exchange. Two more firms have said they plan to join the A list soon. Only 10 percent of more than 1,600 shares in the unregulated market trade on a daily basis. The central bank expects a growing number of companies to agree to full listing – a move that depends on company managers and requires them to publish audited quarterly balance sheets, detailed cash-flow plans and data on debt levels and mortgages. «But we also hope the government will finally agree to allow shares of some public companies and municipal bonds at least,» the source said. Serbia’s landline monopoly Telekom Srbija, power monopoly EPS and oil monopoly NIS are all seen as hot tickets for an initial public offering, but successive Serbian governments have kept on postponing their market debut. The pension fund industry kicked off this year, with the total assets of the six funds, four of them majority foreign-owned, estimated at some 30 million euros. All of them hope to deliver double-digit returns to their clients in 2007.