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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT APRIL 2007
MOLDOVAN STOCK EXCHANGE
Dr. Corneliu DODU
President
2006 was a year full of events and changes
for the Moldavian capital market, which
were a result of the EU integration for
Moldova.
2006 was a year full of events and changes
for the Moldavian capital market, which were
a result of the EU integration for Moldova.
A new entity called a Megaregulator will be
created. The Megaregulator’s function is to
oversee the financial non-banking sector of
the economy, which also includes insurance
companies.
During 2006 projects concerning basic laws
in the securities market were passed,
projects in accounting and audit laws, and
so on. Modernization of the legislation is
implemented in accordance with the directive
requirements of the EU standards.
The calculation and structure of the CNVM
index of the Stock Market, was developed by
the National Securities Committee, and was
changed at the end of 2006.
In 2006 listing requirements and trading rules
concerning direct transactions were
changed. Further, new rules concerning
commissions used by the Exchange were
implemented and new procedures
concerning auction realization were
introduced.
In the context of international cooperation, a
memorandum of understanding between the
Moldavian Stock Exchange (MSE) and the
Bucharest Stock Exchange was signed. Also
in plans is the signing of similar MoU with
few more exchanges.
In 2006, turnover grew to US$ 26.58 million,
which exceeded the amount in 2005 by
59.73%. During 2006 1,845 transactions were
concluded with securities from 265 issuers.
Investors showed their interest primarily in
commercial bank stocks. Transactions with
commercial bank securities have comprised
37% of the total turnover for the year.
The largest transactions of the year were:
the transactions involving securities of
Moldova-Agroindbank, the leading
commercial bank in Moldova, with US$ 9.41
million and that of Ciment, a cement plant,
with US$ 5.18 million.
As before, the main players in the securities
market, the investment funds are missing.
All of them are at the current time in a
process of reorganization or liquidation.
Active trading at the stock market at its
lowest. It is expected that changes in
legislation will lead to the growth of the
securities market, because it is planned that
all transactions concerning corporate
securities will be carried out only at the
Exchange.
HISTORY AND DEVELOPMENT
In December 1994, the MSE, a closed
company, was established under the law on
Securities Circulation and Stock Exchanges.
Originally, 34 securities market professionals
participated in trading. The first transactions
were held on 26 June1995, which is
considered the date of the founding of the
MSE.
Due to the assistance of the USAID, the
Exchange was equipped with advanced
technology for stock auctions. In 1998 the
MSE established the National Securities
Depository (NSD), a non-commercial jointstock
company.
At the initial stage of the MSE's development,
the authorized capital adequacy standards
were set as an authorized capital of
US$ 18,030 (238,000 lei). In 1998 capital
adequacy increased from US$ 29,697
(392,000 lei) and is now US$ 37,879 (500,000
lei). The equity capital sufficiency norms of
US$ 75,758 (1.0 million lei), and guaranty fund
adequacy norms of 30% of the authorized
capital as set by the legislation are currently in
practice.
In April 2000, the MSE received the status of a
self-regulating non-commercial organization.
At the beginning of 2002, the National
Commission introduced the CNVM-32 index.
The world famous index, the Dow Jones
Index, serves as a basis for the calculation of
the CNVM-32.
In June 2005, the MSE celebrated its 10th
anniversary. At the end of 2006 methodology
of calculation CNVM-32 Index was changed,
regarding number of issuers included in index
calculation, diminishing from 32 companies to
24. But the changes that have taken place,
have had a positive effect on the activities of
all participants of the stock market, including
the Exchange itself.
Rules of the MSE were renewed with new
listing requirements for the companies this
spring. There were three listing levels and
non-listing section before, now there are only
two plus non-listing. Also, new projects of
base securities market laws in accordance
with European Standards were introduced to
the community.
FUTURE OUTLOOK
2007 will be a very significant year for
Moldova’s capital market. We are sure that
our securities market will take a big step
forward because of the following aspects:
In an effort to expand cooperation with world
stock exchanges, on 2 November 2006 a
memorandum of understanding was signed
between the MSE and the Bucharest Stock
Exchange. In accordance with our schedule
we are planning to sign an MoU with 5 more
exchanges.
Our legislation concerning the capital market
will be changed. Law on Joint Stock
Companies and Law on Securities Market will
be revised in conformity with European
Standards.
The National Securities Committee will soon
be transformed to a new regulative body,
as it is called now–a Megaregulator. This
organization will control and supervise the
non-banking financial sector, including the
securities market, the insurance services
market, and the minor savings-loan giving
associations.
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