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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2006<br />
TIRANA STOCK EXCHANGE<br />
Dr. Elvin Meka<br />
General Manager<br />
The most important event for 2004 was the<br />
TSE’s development of a securities market<br />
strategy, drafted by TSE’s staff and based<br />
upon the development plan for the<br />
securities market in Albania, prepared by<br />
GMA Capital Markets Ltd.<br />
During 2004, Tirana Stock Exchange (TSE)<br />
emerged, as a well-regulated institution,<br />
capable of ensuring reasonable levels of<br />
protection for various groups of interest, which<br />
may consider and choose to use the securities<br />
market as an investment or financing<br />
alternative.<br />
The most important event for 2004 was the<br />
TSE’s development of a securities market<br />
strategy, drafted by the TSE’s staff and based<br />
upon the development plan for the securities<br />
market in Albania, prepared by GMA Capital<br />
Markets Ltd. By being aware of the special<br />
role, the securities market plays within the<br />
financial system, we aimed, since the TSE’s<br />
inception, to obtain quality foreign assistance<br />
to draw up this baseline document for the<br />
development and functioning of the entire<br />
securities industry in Albania. We are proud to<br />
declare the TSE as the first institution, within<br />
Albanian financial system, to possess a<br />
detailed development strategy since its<br />
commencement. On the other hand, we<br />
managed to offer to the political factor a<br />
complete, formal and integral document, with<br />
clear strategic alternatives, which will serve as<br />
a key transforming mechanism of different<br />
endeavors into tangible results and<br />
contributions, regarding the country’s rapid<br />
economic growth, financial & economic<br />
reforms. It should be noted that this plan is fully<br />
integrated with the government program for<br />
financial transparency and reduction of the<br />
informal economy.<br />
We have already deepened cooperation and<br />
relations with the business community.<br />
Business listing interest has just begun to leave<br />
the empirical phase and is turning to a real<br />
one, mainly driven by the imperative needs for<br />
substantial fresh funds out of traditional<br />
banking channels, consolidation of market<br />
positions, and required respective reforms<br />
within the framework of free trade agreements.<br />
Following this interest, the TSE, in close<br />
cooperation with the Chamber of Commerce,<br />
organized several promotional & training<br />
seminars and workshops, aimed at unfurling<br />
the capital market as a financing alternative.<br />
On the other hand, we continued to attract<br />
membership interest within the TSE, by adding<br />
a new member for 2004, thus establishing<br />
grounds for a complete institutional framework<br />
of securities market with relevant participants.<br />
To close, I want to thank all private and<br />
government entities, academic circles, general<br />
public and media for their kind understanding,<br />
support, encouragement in our persisting<br />
attempts toward creating the securities market<br />
in Albania and believe that, during 2005, we will<br />
accomplish our main objective of transforming<br />
the TSE in a real securities market.<br />
HISTORY AND DEVELOPMENT<br />
The Securities Act was approved by the<br />
Parliament on 1 March 1996, paving the way for<br />
the establishment of the Albanian Securities<br />
Commission (ASC) on 16 April and the Tirana<br />
Stock Exchange (TSE) on 2 May 1996. Once<br />
the law was approved, the necessary rules and<br />
regulations of the ASC and the TSE were<br />
prepared and adopted.<br />
The TSE opened officially on 2 May 1996, as<br />
the first exchange in Albania’a financial history.<br />
The TSE was originally established as a<br />
department of the Bank of Albania with the goal<br />
of spinning off as a separate institution after a<br />
transition period of several years. At the<br />
beginning, trading sessions were held every<br />
Monday and Thursday. By October 1997, the<br />
sessions were increased to every business day,<br />
and 3- and 6-month maturity T-bills were added<br />
to the existing instruments traded. Primary<br />
auctions for T-bills were conducted by the TSE<br />
until 1 August 1998.<br />
The major change in the legal framework of the<br />
TSE was the approval by the Parliament of<br />
some revisions to the actual Securities Law,<br />
which came into force in March 2001. Under<br />
these new changes, the Ministry of Finance<br />
took all practical steps to develop and<br />
institutionalize the capital market in Albania<br />
during 2002. In this way, the TSE was finally<br />
established for the first time, in March 2002, as<br />
an independent institution (joint-stock<br />
company), with the sole owner the Ministry of<br />
Finance.<br />
The TSE obtained its full license on 1 July 2003,<br />
thus becoming the first licensed securities<br />
market in Albania. This license was renewed on<br />
July 2005 and is valid until July 2007. Currently,<br />
TSE counts five full members.<br />
FUTURE OUTLOOK<br />
The main priorities and objectives of the TSE for<br />
2006 are as follows:<br />
• cooperation with respective government<br />
structures in reference to implementing the new<br />
Tirana Stock Exchange & Securities Market<br />
Development Strategy, including partial<br />
privatization of strategic and non-strategic state<br />
owned enterprises through initial public offering;<br />
• cooperation and assistance of domestic<br />
businesses in order to prepare the first initial<br />
public offering,<br />
• preparation of the facilities for possible<br />
primary auctions of long-term Government<br />
securities within the TSE, as well as secondary<br />
auctions for T-Bills and corporate stocks,<br />
• continued public education & information<br />
campaigning to promote both the TSE & capital<br />
market, as well as to attract domestic business<br />
at TSE listing, by making them aware of<br />
advantages the securities market may offer<br />
them; and<br />
• improvement of information technology, at<br />
the TSE including the implementation of the<br />
Electronic Trading System for securities.<br />
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