FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT <strong>JUNE</strong> <strong>2013</strong>TURKISH DERIVATIVES EXCHANGE (TurkDEX)CAPITAL MARKET DEVELOPMENTAND ECONOMIC OUTLOOKTurkDEX started its first trading session onFebruary 4, 2005. Since then TurkDEX offersa diversified range of derivative products on afair, transparent and efficient trading platformproviding suitable solutions for all marketparticipants. Within 5 years TurkDEX showeda remarkable growth in trading volume. Evenwhen global derivatives markets are strugglingTurkDEX’s trading volume remained stableslightly decreasing from TRY 439 billion in 2011to TRY 404 billion in 2012, a total decrease of8%.TurkDEX attracts more and more interest fromdomestic as well as international investors.While growing at constant pace, one ofTurkDEX’s main aims is to integrate the Turkishderivatives market into the global financialsystem by attracting more international investorsto diversify the investor base. In 2012, 84% and16% of total trading volume has been executedby domestic and foreign investors respectively.According to the data of the Futures IndustryAssociation (FIA) TurkDEX was ranked 29th interms of trading volume in the first 8 months of2012. As of December 2012 TurkDEX has 101members all of which are certified banks andbrokerage houses by the CMB.TurkDEX is determined to design and list newproducts in order to better address the needsand demands of all market participants interms of risk management, price discoveryand hedging. With the current and futuremarket trends TurkDEX will experience furthersignificant growth in the future. The last 5 yearsperformance of TurkDEX showed the potential ofthe derivatives markets in Turkey.Key Information ContactsCapital Markets Board of Turkey (CMB) www.cmb.gov.trIstanbul Stock Exchange (ISE) www.ise.gov.trİMKB Settlement and Custody Bank Inc. (Takasbank) www.takasbank.com.trMerkezi Kayıt Kuruluşu (MKK) www.mkk.com.trThe Association of Capital Market Intermediary Institutions of Turkey (TSPAKB) www.tspakb.org.trCONTACT INFORMATIONContact Name Mr. Samil Demirkan E-mail turkdex@turkdex.org.tr Website www.turkdex.org.tr* Please refer to page 51 for the Turkey country report.PAGE 88
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT <strong>JUNE</strong> <strong>2013</strong>ZAGREB STOCK EXCHANGEThe primary task of Zagreb StockExchange is to become the market ofchoice in the region.Ivana GazicPresident of the Management BoardZagreb Stock Exchange faces new challengesin the still uncertain economic environment.Encouraged by signs of a fragile recoveryand with strong fundamentals it will continueto act as an efficient and rule-based marketharmonized with the European standards andremain confident in the progress of the Croatiancapital market. This confidence is even strongersince after long negotiation process thatcommenced in 2005, Croatia is now scheduledto become the 28th European Union MemberState in July <strong>2013</strong>.The primary tasks of Zagreb Stock Exchangewill be to lead the development of thecapital market in the region while providingtransparent, secure, cost-effective and efficientmarketplace as well as to obtain the highestquality of capital market services in order tomeet the needs of investors, issuers and allstakeholders.Zagreb Stock Exchange will carefully observeglobal as well as regional economy and equitymarket trends and remain in line with marketexpectations in order to become the market ofchoice in the region.HISTORY AND DEVELOPMENTThe stock exchange trading in Croatia wasactive since 1907 till 1911 and again since 1919till 1945.After the World War II the Zagreb StockExchange was revived in 1991 as a jointstockcompany with 25 commercial banksand insurance companies. From the initial 25members (brokerage companies), thanks to thetrade growth and development the number ofmembers has climbed to some forty-odd activetraders today: banks and private brokeragecompanies, and 43 shareholders. At the verybeginning, trading took place at big auctionsheld at the Exchange head office with all brokersactually physically present and in 1994, anelectronic trading system was introduced.In 2007, the Croatian financial marketconsolidated as the Varazdin Stock Exchangemerged with the Zagreb Stock Exchange.These new circumstances, resulting in a largernumber of listed securities and greater tradingvolume, along with a natural development of thefinancial market that saw the investment climateimprove and gave rise to a stronger interest ofall market participants in new financial products,highlighted the need for the implementation ofa new system that would be able to meet theneeds of the small, but extremely fast-growingCroatian market.The new trading platform, launched in autumn2007 after several months of preparations,represents an unprecedented technologicalenhancement.ZAGREB STOCK EXCHANGE IN2012If 2012 in the local capital market were to beinterpreted on the basis of statistical tradingdata alone, it might prove difficult to find abright side to the report: regular share turnoverwas practically halved while more than a -35%decline in the total turnover was attenuated tosome extent only by growth in the regular bondturnover in excess of +107%. Stock indicesCROBEX and CROBEX10 ended at virtually thesame level as the year before, which is goodnews actually, especially taking into account atwo-digit correction in the course of 2012.Fortunately, statistical data are not the onlymeasure of market dynamics - figures aside,there were a number of developments whichmight lead to positive results in some futurereports.Year 2012 on the Zagreb Stock Exchange wasmarked by several important anniversaries:20 years since the first ever transaction -concluded on 30 March 1992, and the CROBEXindex celebrated 15 years since its launch,which was highly significant for raising thevisibility of the local capital market, particularly inthe years crucial for strengthening shareholderculture and spurring the interest of foreigninvestors on the Zagreb Stock Exchange and inthe Croatian capital market in general.For three years now, the educational needsof the financial market have been served bythe ZSE Academy, which provided seminars,lectures and training programmes to more than1,000 participants in 2012 alone while educatingmore than 2,000 participants since it wasestablished.However, 2012 will be remembered most for thelaunch of structured securities: for the first timesince the Exchange was founded, this enabledtrading in a new type of instrument - the firstsecurities to be admitted to the InternationalMTF, while also introducing the first foreignissuer to the Zagreb Stock Exchange. Inaddition to expanding the range of investmentproducts in the local market, it also pavedthe way for investing in an asset class whichmight otherwise be very difficult or impossibleto access. As it is, a total of 16 certificates,with gold, crude oil, German Bunds and theDAX index as the underlying instruments,were available for trading on the Zagreb StockExchange by the end of the year. Investorinterest was strong so between mid-September- when certificates trading began - and the endof the year, turnover in structured securitiesreached almost EUR 7 million.FUTURE OUTLOOKCroatia should be a member of the EU from 1July <strong>2013</strong> as the 28th country to join the Union.Full European Union membership is expectedto accelerate fiscal and structural reforms andshould make Croatia more attractive for foreigninvestors.However, structural reforms lag and the concernstill remains while Croatia is yet to see the signsof a sustained economic recovery. Furthergovernment actions will be essential to inducethe recovery of the domestic capital market,especially regarding further privatization ofpublic enterprises.PAGE 89
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