FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010TIRANA STOCK EXCHANGEThe development of a reliable andtransparent securities market according tointernational standards will be one of themain tasks of the Tirana Stock Exchange.Anila FurerajGeneral ManagerThe development of a transparent capitalmarket according to international standards,and activation of the capital market as atrading platform for various financialinstruments, remains the main objective of theTSE.During 2009, for the first time in Albania waspromoted The Albanian Manual of CorporateGovernance. The manual was part of theProgram on Corporate Governance in EasternEurope implemented by IFC, and funded bySECO, in collaboration with Tirana StockExchange. The manual sets the stagereference in the field of corporate governancein Albania, being a referent guide forbusinesses in Albania, for their good corporategovernance. Good governance will meanrecognition, observance and enforcement oflaws and a culture of high society, governanceand management. The manual will help jointstock companies paying particular attention tocapital market in Albania, which may offer thelatter with new ways of investment.Activation of the capital market will makebusinesses understand the benefits that bringsthis market, will bring increased access tofunding, increased performance andtransparency of companies, will help theirshareholders in their decision making withrespect to ownership actions and how theymay be using the capital market and trading insecurities. Although stock companies are fewin number in our country, compared with othercountries in the region, they constitute thedynamic part of Albanian businesses. As such,it is time to request stock companies to followthe principles for good governance of theirown, given the separation of ownership frommanagement of the company, the quality of theBoard of Directors, the responsibility onstakeholders, and other important relatedissues. Good corporate governance reinforcesthe safety, integrity and efficiency of themarket, thus making possible the growth andfinancial stability of the country, and makingAlbania a country always more attractive toinvestors.HISTORY AND DEVELOPMENTTSE is the first and the only stock exchange inAlbania, established in 1996 originally as adepartment of Bank of Albania (BoA). The activityat hand, at that time, was the trading of the T-Billswith 12 months-to-maturity, five series ofgovernment bonds and privatization vouchers. Italso held out the primary auctions for Treasury Billsuntil August 1st, 1998, than this market moved toMonetary Operations Department, at BoA.In March 2002, TSE was structured as a jointventurecompany and a state – owned one, withthe only shareholder Minister of Finance (100% ofthe shares). It’s authorized and subscribed Capitalis equal to 20,000,000 lek (~EUR163,000) with ano. of shares of 20,000. On 07.13.2007, afterseveral periodical - limited licenses since 2002, theAlbanian Financial Authority, granted Tirana StockExchange with an infinite validity license. Thelicense empowers TSE “To operate as a securitiesmarket for the trading of Government / CorporateDebt Securities and Capital securities” with no timerestriction.Market Structure -TradingTSE is an order-driven “open outcry – call market”which uses a manual trading system with physicalpresence of licensed commissioners (members)on the trading floor. There is no electronic tradingsystem so far. Securities’ prices on the tradingsessions are set according to “single pricemethod”, while trading is held:- every Monday and Wednesday, from 10.00 -12.00,for the official market.- every Friday for trading in the parallel market.The eligible tradable instruments are: shares,government papers and corporate bonds. In orderto trade, TSE commissioners should be physicallypresented in the trading sessions. Each tradingsession is conducted in two rounds. Organized asan auction market, TSE calculates a single pricefor each tradable instrument, at the end of eachtrading day.Clearing and settlement for every type of securitiestraded at TSE, is done on a net basis within T+3,in full accordance with “Delivery Versus Payment –DVP” principle. Clearing and settlement fortransactions executed at TSE is done incooperation with second tier commercial banksand Albanian Share Registrar for joint-stockcompany shares.MembershipUp to now, TSE records 4 licensed members, twocommercial banks and two private companies,which offer brokerage services for investors.FUTURE OUTLOOKActivating the securities market as a commontrading platform for several financial instruments,will be the strategic objective of the TSE.Achievement of such an important goal shall becarried out through:• Working closely with and assisting in thecontinuance of domestic top level businesses, TSEmembers, etc. to make them aware of advantagesthe securities market may offer them as well asproviding these stockholders with necessaryinformation, in order to be listed at TSE,• Bilateral negotiations with Albanian Governmenttowards the inclusion of TSE in the privatizationprocess of the state-owned enterprises (SOEs).These negotiations will cover identification ofpotential strategic and non-strategic state ownedcompanies, which can be privatized through IPO,• Negotiations both with the Albanian Governmentand the Ministry of Finance towards theassignment of TSE, by Ministry of Finance (MoF),as Government’s agent in organizing primaryauction for long-term public debt securities,• Negotiation and cooperation with both, MoF andAFSA towards the compilation of legal and fiscalincentives, which are deemed necessary toencourage private companies to raise their capitalthrough IPOs and TSE listing,• Performance of a marketing campaign, in fullcompliance with the marketing program compiledby TSE with a final objective to attract domesticbusiness at exchange listing;• In cooperation with AFSA, carrying out of acontinued public education & informationcampaign regarding the securities market andadvantages that provides its use;• Improvement of information technology at TSE inorder to make it possible to provide the market withan appropriate Electronic Trading System forsecurities;• Keeping fruitful cooperation with institutions inthe region, regarding the exchange of experiencesand staff training, targeting further improvement ofhuman resources capacity within the filed ofsecurities market.PAGE 150
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010TIRANA STOCK EXCHANGEOFFICIAL 6 MONTH STATISTICSUS$ millions# Shares millionsTotal Volume Average Daily Volume Total Volume Average Daily VolumeStocksJul-09 n/a n/a n/a n/aAug-09 n/a n/a n/a n/aSep-09 n/a n/a n/a n/aOct-09 n/a n/a n/a n/aNov-09 n/a n/a n/a n/aDec-09 n/a n/a n/a n/aTOTAL n/a n/a n/a n/aBondsJul-09 n/a n/a n/a n/aAug-09 n/a n/a n/a n/aSep-09 n/a n/a n/a n/aOct-09 n/a n/a n/a n/aNov-09 n/a n/a n/a n/aDec-09 n/a n/a n/a n/aTOTAL n/a n/a n/a n/aOtherJul-09 n/a n/a n/a n/aAug-09 n/a n/a n/a n/aSep-09 n/a n/a n/a n/aOct-09 n/a n/a n/a n/aNov-09 n/a n/a n/a n/aDec-09 n/a n/a n/a n/aTOTAL n/a n/a n/a n/a* The TSE is trading debt instruments only at this time, but there is no volume to-date.MarketCapitalization(US$ millions)Index5-YEAR CURRENCY EXCHANGE(US$ millions)2008-MONTHLY CURRENCY EXCHANGE(US$ millions)Jul-09 n/a n/aAug-09 n/a n/aSep-09 n/a n/aOct-09 n/a n/aNov-09 n/a n/aDec-09 n/a n/a120100806040201201008060402002005 200602007 2008 2009J F M A M J J A S O N DCONTACT INFORMATIONContact Name Ms. Anila Fureraj E-mail afureraj@tse.com.al Website www.tse.com.alPAGE 151
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