JUNE 2013 - FEAS

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013
BAKU STOCK EXCHANGE
Amin Muradov
Chairman
2012 has been the second highly
performing year in terms of trading
volumes in the history of the Baku Stock
Exchange since its inception in 2000.
2012 has been the second highly performing
year in terms of trading volumes in the history of
the Baku Stock Exchange since its inception in
2000. After a very successful year in 2011, the
BSE was able to achieve another 7% increase
in total volume of the transactions in 2012. We
have been continuously in touch with the local
business about the opportunities and benefits
of the capital market and developing efficient
funding platform for their investments.
The year of 2012 is important also in terms
of the commencement of the Capital
Market Modernization Project funded by
the Government of Azerbaijan, World Bank
and State Secretariat for Economic Affairs
of Switzerland (SECO) and managed by the
State Committee for Securities of Azerbaijan
Republic. The main objective of this 4-year
project is to increase the use of equity and
corporate debt as financing and/or investment
instruments through the adoption of an effective
capital markets regulatory framework and
infrastructure. As one of the beneficiaries of the
Project, we are working on modernizing our
trading platform, increase the number of listed
companies and strengthen the institutional
capacity of the BSE.
Concluding the all above, I have to emphasize
that 2013 will be the year of active sales efforts
by the stock exchange. We will implementing
Listing Advisory Program aimed at increasing
the demand for investment capital and/or supply
of investment opportunities and securities
on the Baku Stock Exchange. The goal is to
increase significantly the trading volumes with
the corporate securities within the next 3 years.
HISTORY AND DEVELOPMENT
After gaining it’s independence, and embedding
property and ownership rights in the overall
legal system, Azerbaijan made it first step
toward developing the capital markets by
adopting the Law on “Securities market and
stock exchanges” on 24 November 1992. On
January 13 of 1995 the Law on “Investment
activity” became effective. On September 29
of 1995 the government adopted the first State
Privatization Program for the next three years
which paved the way for the establishment of
the necessary capital market institutions. As a
result, by the end of 1998 28 thousand small
organizations and more than 800 medium and
large enterprises were successfully privatized.
The need for proper regulation of the capital
markets paved the way for the establishment
of the State Committee for Securities (SCS)
under auspices of the President of Republic
of Azerbaijan on December 30, 1998. The vital
part of the capital markets development was
establishment of the Baku Stock Exchange
(BSE) with the help of local and international
financial organizations most of which became
the shareholders of the company.
The first securities to trade on the organized
stock exchange were treasury bills which were
issued by the Ministry of Finance. The first
placement of the stocks and corporate bonds in
the organized stock exchange was in 2003 and
2004 respectively. Since 2004 trading in treasury
bills has grown 9.7 times, trading in central bank
notes has grown 29.2 times, trading in corporate
bonds has grown 22.4 times, and trading in
stocks has grown by 23.6 times at the end of
2012. Currently Closed Joint Stock Company
“Baku Stock Exchange” has 19 shareholders.
Throughout the period since inception, the BSE
has managed to establish a well-organized
securities trading platform effectively linked with
other market participants.
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