FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2007TIRANA STOCK EXCHANGEThe year 2006 was characterized bydevelopments which improved theprocedural and legal infrastructure for thedevelopment of the Tirana Stock Exchange.Anila FurerajGeneral ManagerThe year 2006 was characterized bydevelopments which improved the proceduraland legal infrastructure for the development ofthe Tirana Stock Exchange (TSE). The politicalchanges, taking place in our country, haveopened new opportunities for the improvementof the economic climate, encouragement oflocal and foreign investment and the waragainst informality; these factors will worktowards bringing about the encouragement ofdevelopment in the capital markets in Albania.During this year the management andadministrative arms of the TSE werereorganized. In this aspect, at the beginning ofthis year, new members of the TSE SupervisoryBoard were appointed by the Minister ofFinance, as the only shareholder of thecompany. The Supervisory Board has alsoappointed a new General Manager. Thereorganization was followed by the changing ofthe organization scheme of the functioning ofthe Exchange and the adaptation of personnelnumbers to be in line with its actualdevelopment conditions. All these changeswere done for a better management of theExchange and to create better conditions fortransforming the TSE into a real securitiesmarketThe purpose of our work has been thebroadening of the development of the TSE andthe taking further steps so as to transform theTSE into an active exchange. For this reason,the TSE started the work of reviewing thestrategy of the development of the TSE inaccordance with the actual conditions ofmarket developments and in the setting of the2005-2009 Government Program. Thesestrategies aim is to transform the TSE into areal securities market. At the same time,statistical analyses were done in connectionwith the volume of transactions made in theinformal market of stocks from anonymouscompanies. Through this analysis thepossibility was shown of channeling thesetransactions from the informal market towardsthe organized market, as a necessary step, forthe reduction of informality in the economy andthe re-activation of the TSE.We have also undertaken many other differentprojects with various groups of interest aimingnot only at their susceptibility but also offeringour legal and technical assistance.During 2006 the complete internal regulatorybase of the functioning of the TSE has beenimproved, leaning on the guidelines given bythe <strong>FEAS</strong> according to the Book of Rules andrecommendations given by the consultinggroup, GMA Company.HISTORY AND DEVELOPMENTThe Securities Act was approved by theParliament on 1 March 1996, paving the way forthe establishment of the Albanian SecuritiesCommission (ASC) on 16 April and the TiranaStock Exchange (TSE) on 2 May 1996. Oncethe law was approved, the necessary rules andregulations of the ASC and the TSE wereprepared and adopted.The TSE opened officially on 2 May 1996, asthe first exchange in Albania’s financial history.The TSE was originally established as adepartment of the Bank of Albania with the goalof spinning off as a separate institution after atransition period of several years. At thebeginning, trading sessions were held everyMonday and Thursday. By October 1997, thesessions were increased to every business day,and 3- and 6-month maturity t-bills were addedto the existing instruments traded. Primaryauctions for t-bills were conducted by the TSEuntil 1 August 1998.The major change in the legal framework of theTSE was the approval by the Parliament ofsome revisions to the actual Securities Law,which came into force in March 2001. Underthese new changes, the Ministry of Financetook all practical steps to develop andinstitutionalize the capital market in Albaniaduring 2002. In this way, the TSE was finallyestablished for the first time, in March 2002, asan independent institution (joint-stockcompany), with the sole owner the Ministry ofFinance.The TSE obtained its full license on 1 July 2003,thus becoming the first licensed securitiesmarket in Albania. This license was renewed inJuly 2005 and is valid until July 2007. Currently,the TSE has five full members.FUTURE OUTLOOKActivating the securities market as a commontrading platform for several financialinstruments, will be the strategic objective ofthe TSE during 2007. Achievement of such animportant goal shall be carrried out throughpractical implementation of the strategicalternatives pointed out within the TSEDevelopment Strategy. The activity of the TSEduring 2007 will be mainly focused in:• the approval of TSE Development Strategy inthe Government’s Economic Policy Committeeas well as the implementation of the Action Planas an integral part of this strategy;• working closely with and assisting in thecontinuance of domestic top level businesses.Make the TSE members aware of theadvantages the securities market may offerthem as well as providing these stockholderswith the necessary information, in order to belisted at the TSE,• bilateral negotiations with AlbanianGovernment towards the inclusion of the TSE inthe privatization process of the state-ownedenterprises (SOEs). These negotiations willcover identification of potential strategic andnon-strategic state owned companies, whichcan be privatized through IPO,• negotiations both with the AlbanianGovernment and the Ministry of Financetowards the assignment of the TSE, by theMoF, as the Government’s agent in organizingprimary auction for long-term public debtsecurities,• negotiation and cooperation with both, theMoF and the Albanian Financial SupervisoryAuthority towards the compilation of legal andfiscal incentives, which are deemed necessaryto encourage private companies to raise theircapital through IPOs and the TSE listing,• performance of a marketing campaign, in fullcompliance with the marketing programcompiled by the TSE with a final objective toattract domestic business for exchange listing;• in cooperation with AFS, carrying out of acontinued public education & informationcampaigning regarding the securities marketand advantages of investing;• improvement of information technology at theTSE in order to make possible the providing ofthis market with an appropriate ElectronicTrading System for securities;• keeping fruitful cooperation with institutions inthe region, regarding the exchange ofexperiences and staff training, targeting furtherimprovements in human resource capacitywithin the field of the securities market.PAGE 132
FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2007TIRANA STOCK EXCHANGEOFFICIAL 6 MONTH STATISTICSUS$ millions# Shares millionsTotal Volume Average Daily Volume Total Volume Average Daily VolumeStocksJan-06 n/a n/a n/a n/aFeb-06 n/a n/a n/a n/aMar-06 n/a n/a n/a n/aApr-06 n/a n/a n/a n/aMay-06 n/a n/a n/a n/aJun-06 n/a n/a n/a n/aTOTAL n/a n/a n/a n/aBondsJan-06 n/a n/a n/a n/aFeb-06 n/a n/a n/a n/aMar-06 n/a n/a n/a n/aApr-06 n/a n/a n/a n/aMay-06 n/a n/a n/a n/aJun-06 n/a n/a n/a n/aTOTAL n/a n/a n/a n/aOtherJan-06 n/a n/a n/a n/aFeb-06 n/a n/a n/a n/aMar-06 n/a n/a n/a n/aApr-06 n/a n/a n/a n/aMay-06 n/a n/a n/a n/aJun-06 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)MONTHLY CURRENCY EXCHANGE(US$ millions)Jan-06 n/a n/aFeb-06 n/a n/aMar-06 n/a n/aApr-06 n/a n/aMay-06 n/a n/aJun-06 n/a n/a1201008060402002003 2004 2005 20061009080706050403020100YTD 2007 Jan Feb Mar Apr May JunCONTACT INFORMATIONContact Name Ms. Anila Fureraj E-mail afureraj@tse.com.al Website www.tse.com.alPAGE 133
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