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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT APRIL 2007
UKRAINIAN STOCK EXCHANGE
Valentin Oskolsky
Chairman of the Board
It is our belief that the chosen strategy
will gradually result in the creation of a
transparent, liquid, investment attractive
to both national and foreign investors,
capital market.
The Ukrainian Stock Exchange (USE)
entered 2005 year with great expectations
like an all others participants of the market.
However, political changes and government
replacements played its role for market
development and investments processes.
The annual stock exchange turnover
decreased almost in 2 times from US$ 300
million in 2004 to US$ 156 million in 2005.
Long term expected Law “On Joint-Stock
Companies” that should make market more
transparent still was not adopted by the
Parliament.
Nevertheless the USE continues to work at
technical trading improvements. Electronic
trading was launched. The USE also
continued with arrangements to implement
electronic documentation turnover and
electronic digital signature according to
Ukrainian legislation.
One of the main problems of the Ukrainian
market is still domination of unorganized
(shadow) market under the organized
exchange market. The other point is the
absence of a real secondary exchange
market. Most of transactions are conducted
in OTC market.
The main part of the exchange’s turnover as
in previous years is the privatization market.
Trading of state-owned shares was
successfully performed through the USE,
but we believe that our efforts on creating a
free-float market in Ukraine will soon be
realized.
The USE provides educational activity.
The USE as a co-founder of the Kiev
Slavonic University continued its work
with students, through the Securities Chair.
Starting from 2002 there has been a
Student Stock Exchange at the USE. Every
student has an opportunity to become an
exchange specialist and then a broker.
Through gaining theoretical and practical
knowledge, accumulating experience,
students realize the importance of capital
markets and can make their choice of
future professions.
It is our belief that the chosen strategy will
gradually result in the creation of a
transparent, liquid, investment attractive to
both national and foreign investors, capital
market.
HISTORY AND DEVELOPMENT
USE is a pioneer in the capital market of
Ukraine, created according to Law “On
Securities and the Stock Exchange”, and
registered by decision of the Cabinet of
Ministers on 29 October 1991. The USE is a
closed joint-stock company with an
authorized capital divided into 288 ordinary
nominal shares belonging to legal entities. In
1997, according to the Law “On State
Regulation of Securities Market in Ukraine”,
the Securities and Stock Market State
Commission re-registered the USE. Since
June 1998 the USE has been a selfregulated
organization. There are 117
registered brokerage companies as USE
members as of 1 January 2006. The USE
has 3 branches in the largest Ukrainian
regions. In 1993, the USE became a pioneer
of money privatization and implemented the
exchange mechanism of price creation.
The USE is a member of the Coordinating
Council for the functioning of securities
market charged by the President of Ukraine.
It’s also a member of the Consulting &
Experts Council in the SSMSC, the Ukrainian
Chamber of Commerce and Industry, the
Academy of Economic Science and the
Academy of Engineering Science of Ukraine,
the Board of Ukrainian Council on Economic
Education and the Ukrainian Community
“Intelligence of the Nation”.
Chairman of the Board of USE Mr. Valentin
Oskolsky is also President of Union of
Economists of Ukraine and President of
Article Numbering Association of Ukraine.
The USE has created many educational
programs in association with the Slavonic
University.
The official publication, “Hermes”, can be
found in the daily newspaper “Ukraine
Business”.
FUTURE OUTLOOK
Plans for the USE in 2006 include:
• expansion through a System of Electronic
Trading (SELT USE) into secondary
securities turnover and trading the internal
state loan bonds;
• creation of the conditions and basis for
formation and development of a derivatives
market;
• take actions to attract new members to
operate in SELT USE;
• participation in the privatization processes
planned to be implemented by the State
Privatization Program and the Law of
Ukraine “On State Budget of Ukraine for
2006”;
• improvement of technologies for trading
State-owned shares of privatized
companies;
• promotion for the attraction of direct
national and foreign investments to develop
strategically important industry companies
during the process of its privatization;
• development of the electronic
documentation turnover and electronic
digital signature according to new Ukrainian
legislation;
• development of Exchange information
areas, expansion of publishing, scientific,
methodical and educational activities in
order to prepare specialists for national
capital market; and
• strengthening the international
cooperation with foreign stock exchanges
and international financial organizations.
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