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