JUNE 2013 - FEAS

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013FEDERATION OF EURO-ASIAN STOCK EXCHANGESİbrahim TurhanChairperson of FEASAs we close our 16th year, we look to thefuture with a renewed sense of purposeand a detailed strategy for achieving ourgoals.The effects of Global Financial Crisis havecontinued throughout the whole World during2012. The world economy has expanded by3.2% corresponding to a slowdown whencompared to 4.4% growth in 2011. The globaleconomy is expected to grow by 3.3% and4.0% in 2013 and 2014, respectively. Whilethe growth in advanced economies has been1.2%, emerging and developed markets hasgrown by 5.1%. The expectations regarding theadvanced economies reflects the relative weakrecovery, namely the growth is expected to bearound 1.2% and 2.2% in 2013 and 2014. Onthe other hand, the momentum within emergingmarkets seems to continue with expectedoutput increase of 5.3% in 2013 and 5.7% in2014 according to IMF predictions. In the shortrun,risks associated with Euro-area appear tocontinue. On the other hand, in the mediumand long term, the strategies of central banksto cease excessive liquidity injections and fiscalpolicies that would appropriately reduce publicdebt will be main dominant factors that aregoing to shape future performance of the Worldeconomy.In terms of capital markets, according to theWFE data, the volume of equity transactions inmember exchanges has decreased by 22.5%with a total amount of US$ 49 Trillion. Thevolume of derivatives transactions dwindledas well by 20%. The total volume of equityand interest rates contracts has been 14.9billion during 2012. The downward trend involume can also be observed in terms of ETFs,securitized derivatives, and bonds transactions.Given this remarkable decline in the volumesworldwide, the interactions among stockexchanges became much more crucial. In thisrespect, FEAS initiative is one of the leadingmodels integrated markets creating a commonshield for economic turbulences while tradingthe mutually beneficial products.In its eighteenth year of operation, FEASaccomplished some noteworthy events suchas the first Summit which has been hostedby Borsa Istanbul on May 20 just beforethe Working Committee Meeting. Severalmembers presented their countries’ investmentopportunities towards the Foreign and localinvestors in the audience.During 2012, FEAS continued the On-SiteTraining Program where 10 member exchangeshave applied to send their colleagues for atwo-week program, hosted by Tehran StockExchange. Also, the First Executive BoardMeeting and Working Committee Meeting heldin Istanbul, Turkey in May, together with theWorking Committee; FEAS General AssemblyMeeting and Executive Committee Meeting washeld in Sofia, Bulgaria on September 2012.I also would like to take this opportunityto extend my heartfelt thanks for theircontributions to Finans Asset Management, IsInvestment, and Tayburn Kurumsal, for makingthis publication possible.The future outlook for our markets seems todepict that our member markets continueto provide competitive and viable financingoptions to both government and privatesectors, while enhancing operations throughtechnology and expanding the services offeredto market participants. We surely continue tofocus on the areas of increased transparencythrough investing in infrastructure anddeveloping regulations to promote strongerenvironmental social governance. The effortsof all our Task Force Members will surelyplay a vital role in achieving our objectivesthrough their commitment and hard work andthe Secretariat for maintaining our cohesiveorganization. As we close our 16th year, welook to the future with a renewed sense ofpurpose and a detailed strategy for achievingour goals.PAGE 3