JUNE 2013 - FEAS

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013TIRANA STOCK EXCHANGEAnila FurerajGeneral ManagerThe development of transparent capitalmarket, based on international standardsand activation of capital market as atrading platform for different financialinstruments, is the main objective of TSE.Tirana Stock Exchange is the only securitiesmarket in Albania. The development oftransparent capital market, based oninternational standards and activation of capitalmarket as a trading platform for differentfinancial instruments, is the main objective ofTSE.The presence of an active domestic capitalmarket and efficient, would give companies theoption to increase capital by understanding thatbrings real benefits for the capital market. Anactive and efficient capital market will expandthe capital market in Albania by providingvarious investment opportunities andmechanisms to ensure efficient and transparentpricing will increase access to finance forAlbanian companies.As requirement of new law “On Securities”were draw the Rules of Tirana Stock Exchangethat was approved by Financial SupervisoryAuthority Board. In these rules are include in asystematic manner rules of membership, listing,trading, clearing and settlement of transactionon securities that will be trading in Tirana StockExchange.Rules of Tirana Stock Exchange were preparedand adapted with contemporary generalprincipals for functioning of capital market ofEuropean countries and have like purposeprotections of investors and ensure a fulltransparency of companies that will be listingin Exchange, protection of minor stakeholdersinterests and ensure the equal treatment forall shareholders, application of InternationalStandard of Accounting for all companies thatbe listing in Exchange and prevention of illegalpractice in trading securities on Exchange.The capital market needs for particularlyattention from business. Till offer and demandfor the market product will be in continuously indevelopment, than time is coming that activityof this market will grow and will be useful forparticipant of this market.HISTORY AND DEVELOPMENTTSE is the first and the only stock exchangein Albania, established in 1996 originally asa department of Bank of Albania (BoA). Theactivity at hand, at that time, was the tradingof the T-Bills with 12 months-to-maturity, fiveseries of government bonds and privatizationvouchers. It also held out the primary auctionsfor Treasury Bills until August 1st, 1998, thanthis market moved to Monetary OperationsDepartment, at BoA.TSE was structured as a joint stock companyand a state - owned one,, on March 2002, andshareholder was State, represented by Ministerof Finance (100% of the shares). It’s authorizedand subscribed Capital is equal to 20,000,000lek (~EUR163,000) with a no. of shares of20,000. On 07.13.2007, after several periodical- limited licenses since 2002, the AlbanianFinancial Supervisory Authority, licensed TiranaStock Exchange with an infinite validity license.The license empowers TSE “To operate as asecurities market for the trading of Government/Corporate Debt Securities and Shares” with notime restriction.Market Structure -TradingTSE is an order-driven “open outcry - callmarket” which uses a manual tradingsystem with physical presence of licensedcommissioners (members) on the trading floor.Securities’ prices on the trading sessions areset according to “single price method”, whiletrading is held:- every Monday and Wednesday, from 10.00 -12.00, for the official market.- every Friday for trading in the parallel market.The eligible tradable instruments are: shares,government and corporate bonds. In order totrade, TSE commissioners should be physicallypresented in the trading sessions. Each tradingsession is conducted in two rounds. Organizedas an auction market, TSE calculates a singleprice for each tradable instrument, at the end ofeach trading day.Clearing and settlement for every type ofsecurities traded at TSE, is done on a net basiswithin T+3, in full accordance with “Deliveryversus Payment - DVP” principle. Clearingand settlement for transactions executed atTSE is done in cooperation with second tiercommercial banks and Albanian Share Registrarfor joint-stock company shares.MembershipTSE records 5 licensed members, threecommercial banks and two private companies,which offer brokerage services for investors.FUTURE OUTLOOKActivating the securities market as acommon trading platform for several financialinstruments, will be the strategic objective of theTSE. Achievement of such an important goalshall be carried out through:• Working closely with and assisting inthe continuance of domestic top levelbusinesses, TSE members, etc. to makethem aware of advantages the securitiesmarket may offer them as well as providingthese stockholders with necessaryinformation, in order to be listed at TSE,• Bilateral negotiations with AlbanianGovernment towards the inclusion of 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 with the Albanian Governmentand the Ministry of Finance towards theassignment of TSE, by Ministry of Finance(MoF), as Government’s agent in organizingprimary auction for long-term public debtsecurities,• Negotiation and cooperation with MoFand AFSA towards the compilation of legaland fiscal incentives, which are deemednecessary to encourage private companiesto raise their capital through IPOs and TSElisting,PAGE 83