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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2005
UKRAINIAN STOCK EXCHANGE
Valentin Oskolsky
Chairman of the Board
2004 can be characterized as a successful
year for the Ukrainian Stock Exchange (USE)
because of the increase of securities traders’
activity. The annual stock exchange turnover
increased 72 times in comparison to 2003.
The main reason for this leap was the initial
public offering of options and its entrance in
the secondary market. In 2004 the number of
options issuers has increased and, of
course, bids growth resulted from asks’
growth.
In 2004 good progress was made from the
legislation stand point. Starting from the 1st
of January 2004 the Civil and Economic
Codes became valid which is expected to
encourage market activity.
HISTORY AND DEVELOPMENT
The 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 122
registered brokerage companies as USE
members as of 1 January 2005. 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.
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It is our belief that the chosen strategy of
the USE will gradually result in the creation
of a transparent, liquid, investment
opportunity attractive to both national and
foreign investors in the capital markets.
The USE continues to work at technical
trading improvements. Electronic trading was
tested during 2004. 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 the absence of a real secondary
market. Throughout the existence of the
market the main trading sector was 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 is a member of the Coordinating
Council for the functioning of securities
markets 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”.
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 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
based on real exposure.
It is our belief that the chosen strategy will
gradually result in the creation of a
transparent, liquid, investment opportunity
attractive to both national and foreign
investors in the capital markets.
FUTURE OUTLOOK
Plans for the USE in 2005 include:
• putting into operation the System of
Electronic Trading (SELT at USE);
• expansion through SELT on the basis of
secondary securities turnover and trading
the internal state loan bonds;
• creation of the conditions and basis for
formation and development for a derivatives
market;
• implementation of a derivative market
section in SELT USE;
• participation of the USE in the privatization
processes planned to be implementated by
the State Privatization Program and the Law
of Ukraine “On State Budget of Ukraine for
2005”;
• 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 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 of international cooperation
with foreign stock exchanges and
international financial organizations.
.