FEAS Yearbook FEAS Yearbook 2003 | Page 70

MOLDOVAN STOCK EXCHANGE The securities market is an integral part of the overall financial market and its activity reflects the state of affairs of the Republic. With the country’s goal to become integrated into the European Union as well as a globally recognized developed stock market, foreign policy has become the priority. Dr. Corneliu Dodu President With the country’s goal to become integrated into the European Union as well as a globally recognized developed stock market, foreign policy has become the priority. A major objective for the coming year is the reorganization of investment funds. One way to achieve this goal will be through the establishment of holdings. Based on the above, activity on the Exchange in 2004 will be greatly influenced by programs associated with our future outlook toward development. The level of investing activity in December is generally high, but December 2003 outshone the indices of the years from 1999 to 2002. The volume of transactions registered in 2003 was US$ 36.4 million compared to US$ 19.43 million in 2002. In 2003 transactions in 252 trading sessions with trading in 4.1 million stocks belonging to 354 joint-stock companies were achieved. The transaction of the year was the offering of the stocks of the beer factory “Efes Vitanta Moldova Brewery”, which brought to the market a tender offer of 96.5% on a volume of US$ 12.7 million or 35% of total market volume. HISTORY AND DEVELOPMENT In December 1994, the Moldovan Stock Exchange (MSE), a closed company, was established under the law on Securities Circulation and Stock Exchanges. Originally, 34 securities market professionals participated in trading. The first transactions were held on 26 June1995, which is considered the date of the founding of the MSE. Due to the assistance of the USAID, the Exchange is equipped with advanced technology for stock auctions. In 1998 the MSE established the National Securities Depository (NSD), a non-commercial joint-stock company. At the initial stage of the MSE's development, the authorized capital adequacy standards were set as an authorized capital of US$ 18,030 (LEI 238,000). In 1998 capital adequacy increased from US$ 29,697 (LEI 392,000) and is now US$ 37,879 (LEI 500,000). The equity capital sufficiency norms of US$ 75,758 (LEI 1.0 million), and guaranty fund adequacy norms of 30% of the authorized capital as set by the legislation are currently in practice. A series of restrictions was implemented in the legislature. These restrictions changed not only settlement of transactions, but also their structure. Buying and selling transactions amounted to 54% of the total volume; swap transactions were 2%, repo transactions were 8% of the total volume and the block sale of Efes Vitanta Moldova Brewery was 35% of the total volume. The number of registered companies as of 31 December was 1,078, including 24 listed companies. FUTURE OUTLOOK In April 2000, the MSE received the status of a self-regulating non-commercial organization. At the beginning of 2002, the National Commission introduced the CNVM-32 index. The world famous index, Dow Jones, serves as a basis for the calculation of the CNVM-32. The Dow Jones index is worked out in real time using the results of the New York Stock Exchange auctions. In June 2003, the MSE celebrated its eighth anniversary. During the period of its development, the MSE underwent a difficult evolution. But thorough changes have taken place, which have had a great influence on the activities of all participants of the stock market, including the Exchange itself. FEDERATION OF EURO-ASIAN STOCK EXCHANGES YEARBOOK 2003/2004 PAGE 68 Below are the MSE’s plans for the future: • improve technologies to high-speed networks that will increase capacity; • introduce a module for electronic settlement with banks; • trade in public securities and introduce derivative products; and • introduce a “remote broker” system, currently underway.