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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2008BAKU STOCK EXCHANGEKhayal AbdinovChairman2007 was a fruitful and successful year forthe BSE since in that year our tradingvolume grew 4 times and reached US$ 6.5billion for the first time in its history.2007 was a fruitful and successful year for theBaku Stock Exchange (BSE). Since 2006 ourtrading volume grew 4 times and reached US$6.5 billion for the first time in the BSE’s historyagainst US$ 1.6 billion.The BSE is developing from year to year. Theexchange has recently completed thenegotiations on the purchase of a new tradingsystem. The exchange also continues theprocess of modernization of its internal rulesand documents and this process will continuein 2008, too.The BSE has almost completed negotiationsregarding purchasing of a new tradingsettlementsystem which is intended to beinstalled this year. The new trading system willcreate new opportunities for the local marketparticipants and will introduce new financialinstruments.In 2007, the BSE also focused ondevelopment of foreign relations. The BSEsent staff to visit foreign exchanges. At theFEAS General Assembly held in Belgrade,Serbia, the BSE agreed with FEAS to hold thenext Working Committee meeting in Baku.FUTURE OUTLOOKThe BSE plans to purchase a new tradingsystem. The new trading system is expected tobe presented for use by the market participantsin 2008.This year the BSE will adopt new listing rules,which are in the process of being prepared. Inaddition, the BSE attaches great attention to themodification of other internal rules. Adopted in2000, some of those rules do not meet therequirements of the market, and therefore, in2008 they are expected to be modified.In 2008 the BSE will continue to work ondevelopment of the corporate securities market.The state securities market will also be thefocus of attention since it is planned to continuethe process of attracting the investors’ attentionto this segment of the market.Recently some new banks have beenestablished in Azerbaijan, and generally, thebanking sector in the country is rapidlydeveloping. This factor is a positive influence onthe stock market of the country.Money supply in the economy of the countrygrows and the banks are involved more andmore actively in the stock market; as a result,the Exchange expects continued growth ofmoney supply in the stock market.CONTACT INFORMATIONContact Name Mr. Kamran AliyevE-mail k.aliyev@bse.azWebsite www.bse.azPAGE 36