FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT <strong>JUNE</strong> <strong>2013</strong> Swiss Futures Options Associations (SFOA) Board of Directors Chairman Otto E. Naegeli, OEN Consulting, Torricella Vice Chairmen Patrick J. Catania, Asia West Group, Chicago Michael Hofmann, ABN AMRO Clearing Bank N.V., Frankfurt a/Main President and CEO Paul-André Jacot, Derivacom, Geneva Members François Bouclier, Newedge Group, Geneva Daniel Grossrieder, UBS AG, Zurich Andrew Lowenthal, CBOE Futures Exchange, Chicago Michael Peters, EUREX, Frankfurt a/ Main Markus Pfister, Bank Vontobel AG, Zurich Francesco Ranza, Banque Privée Ed. de Rothschild SA, Geneva Robert Ray, CME Group, London Christian Reuss, Scoach Schweiz AG, Zurich Lamon Rutten, Multi Commodity Exchange of India Ltd., Mumbai Alan van Griethuysen, Public Member, Amsterdam CONTACT INFORMATION Contact Name Mrs. Carol Gregoir E-mail info@sfoa.org Website www.sfoa.org PAGE 80
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT <strong>JUNE</strong> <strong>2013</strong> TEHRAN STOCK EXCHANGE Hassan Ghalibaf CEO TSE tried to increase market transparency and liquidity, diversify financial instruments, improve surveillance mechanism and develop the investment culture within the Iranian society. In 2011, the global value traded, with little decrease (0.1), remained relatively stable. Market capitalization of the global Exchanges, with significant decrease of 13.6% reached the figure less than it in 2009. Moreover, according to the main indices of the Exchanges being member of the World Federation of Exchanges, average return of the members had 11.9% decreases, as compared to the previous year. The main factors affecting the decrease are high volatility, global uncertainty created from sovereign debt crisis. In this year, Exchanges tried to diversify their financial instruments using various bonds, exchange traded funds and other instruments. Despite of challenges related to implementing the first phase of targeted subsidies law, fluctuations in the gold and foreign currency market and movement of liquidity toward these two markets and challenges in the international relations, TSE, against the general trend of the world market, had a growth of operation indices last year. Moreover, TSE tried to increase market transparency and liquidity, diversify financial instruments, improve surveillance mechanism and develop the investment culture within the Iranian society. In this period, market capitalization and value traded showed 33.4% and 8.2% growth respectively. Also, block and retail trades had 34% growth, as compared to the previous year, which shows liquidity increases in the market. Listed firms had 82% growth of capital increase, 63% of which was from cash contributions and receivables. Also, free floats reached from 19% to 23%. All the above mentioned factors indicate market transparency, integrity and liquidity. In order to meet the accountability principles, have a transparent interaction with stakeholders, and promote market integrity and transparency, some effective plans have been implemented in cooperation with other responsible institutions, including development of the calculation directives of corporate governance index and presentation of it to Securities and Exchange Organization (SEO), participation in mechanizing parts of members oversight and inspection, and enforcement of discipline regulations of brokers. Other actions taken by TSE are to revise and update information rules, to introduce new trading mechanism, to plan operation of closing discontinuous auctions and closing trades, and to plan securities lending mechanism. As a plan to attract foreign investors, some conferences have been held including Finance Opportunities of Listed Firms and Listing Economic Firms at TSE. During the year 2011 six firms have been listed and offered in TSE. Also, 4 items of future contracts and 2 items of participation certificates have been listed in the Exchange. To develop and support derivatives market, enhance the trading system and facilitate the market access, some actions have been taken, including proposing for mechanism regulations of credit finance to SEO, seeking for option trading rules approval, launching Exchange Traded Funds at TSE and increasing the number of underlying shares of future contracts. Also, some efforts have been made for development of market awareness and promotion of financial literacy through targeted training courses, books, web-sites, seminars and TV programs in order to help people to make informed participation in the capital market. HISTORY AND DEVELOPMENT Tehran Stock Exchange (TSE) was founded in 1967, by starting with only six listed companies. Since then, the Exchange has experienced considerable changes in the path of development. Today, six years after its demutualization, which took place on 6 December 2006, TSE has gradually demonstrated its potentiality as a leading Exchange in the region and developed into an ever growing marketplace, including more than three hundred and twenty listed companies with a market capitalization of above US$ 100 billion (December 2012). TSE is aiming at promoting the Iranian capital market to respond to the socio-economic development requirements of the nation. The Exchange helps and stimulates industrial, as well as economic growth and development of the country’s financial sector. TSE is preparing to maintain a strong and transparent market in order to give opportunity to the investors to convert their cash into securities at a fair and honest price and vice versa, and is developing to become a highly liquid secondary market for securities to raise funds and win confidence from all stakeholders. TSE is planning to operate as a world-class marketplace for Iranian securities and derivatives products. It strives to offer issuers access to a wide national marketplace. By servicing Iran’s substantial long-term demand for capital and exchange services in accordance with international standards and practices, it is believed that TSE has the potential to become one of the preeminent Exchanges in the Persian Gulf region and beyond. Privatization, as a priority is both followed by the State and managed by TSE on the one hand, to facilitate the economic reforms, and on the other one, to improve and support the Iranian securities market. Moreover, financing through capital market is felt as an obligation for the Iranian economy’s growth and in this fashion, shares of two banks, two petrochemical companies and a provider of electronic services were listed and publically offered in the Exchange in 2011. The option contracts regulations have been sent to the Iranian Securities and Exchange Organization for ratification. In 2012, TSE held a <strong>FEAS</strong> event in Tehran. The second On-site Training Program was held in Iran, 10-21 November 2012. The two-week event included different courses and visits at the Iranian capital market’s entities. Tehran Stock Exchange was the main host of the event, and was contributed by Iran’s Securities and Exchange Organization, Iran Mercantile Exchange, Iran Farabourse, Central Securities Depository of Iran, as well as two investment banks, and three brokerage firms. The program’s participants were managers and experts from Oman, Pakistan, Macedonia, Uzbekistan, Syria, Turkey and Kazakhstan capital markets. Five new companies, including two companies from oil and gas sector, a shipping company, one insurance company, as well as a banking IT service provider were listed at the Exchange in 2012. Also, an investment firm was transferred from Iran Farabourse (SMEs market) to TSE in the same year. FUTURE OUTLOOK • Expanding the country’s capital market share by increasing the number of listed companies and improving market liquidity • Developing new opportunities through introducing new financial tools • Continuous evaluation of rules and regulations in compliance with market requirements • Developing financial knowledge and improving investment and shareholding culture in Iran by educational programs and through mass media • Extending trading infrastructure • Enhancing market transparency through upgrading market surveillance and related IT systems • Increasing international cooperation and participation in international associations • Focusing on development and enhancement of TSE competitive advantages PAGE 81
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