FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
TIRANA STOCK EXCHANGE
Anila Fureraj
General Manager
The Albanian financial system is currently centered on
banks while the equity market is still remarkably
underdeveloped. However, for the development of
the Albanian economy and private entrepreneurship a
broad access to finance going beyond the banking
sector is essential. Through the development of the
securities market companies can reduce their overall
costs of capital. Therefore, the presence of an active
and efficient domestic securities market, as seen also
in smaller countries in the European Union, would
give companies alternative means of raising capital in
the event that banks are unable to do so.
Furthermore, an active and efficient securities market
would broaden the Albanian capital market by
offering savers opportunities to invest in a wider
range of assets and would provide efficient and
transparent pricing mechanisms. Finally, it would
increase the access to finance for the Albanian
companies and thereby contributing to higher
employment rates and poverty reduction. The
development of a reliable and transparent securities
market according to international standards will be
one of the main tasks of the Tirana Stock Exchange
(TSE).
Activating the Albanian securities market as a
common trading platform for several financial
instruments, is the strategic objective of TSE. The
achievement of such an important goal shall be
carried out through the practical implementation of
HISTORY AND DEVELOPMENT
The TSE opened officially on 2 May 1996, as the first
exchange in Albania’s financial history. The TSE was
originally established as a department of the Bank of
Albania with the goal of spinning off as a separate
institution after a transition period of several years. At
the beginning, trading sessions were held every
Monday and Thursday. By October 1997, the
sessions were increased to every business day, and
3- and 6-month maturity T-bills were added to the
existing instruments traded. Primary auctions for T-
bills were conducted by the TSE until 1 August 1998.
The major change in the legal framework of the TSE
was the approval by the Parliament of some revisions
to the actual Securities Law, which came into force in
March 2001. Under these new changes, the Ministry
of Finance took all practical steps to develop and
institutionalize the capital market in Albania during
2002. In this way, the TSE was finally established for
the first time, in March 2002, as an independent
institution (joint-stock company), with the sole owner
the Ministry of Finance.
On 07.13.2007, The Albanian Financial Authority,
granted Tirana Stock Exchange with an infinite validity
license. This was done after TSE fulfilled successfully
the preliminary criteria/conditions imposed by the
Authority to obtain an infinite license.
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The development of a reliable and
transparent securities market according to
international standards will be one of the
main tasks of the Tirana Stock Exchange
(TSE).
the strategic alternatives pointed out within the TSE
Development Strategy.
In accordance with the Constitution of the Republic of
Albania and on proposal of the Council of Ministers,
the parliament of Albania approbated the new Law
“On Securities”, no. 9879 dated 02.21.2008. The
actual Law, which invalidates the former Law has
brought forward an innovation to the domestic capital
market by replenishing, enriching and adopting the
legislation according to the latest EU Standards.
Further more the new Law brought changes and
renewed the structure of the financial instruments, the
organization and function of the securities exchange,
as well as of securities, brokerage-houses, brokers,
investing companies, registry of securities, clearing
and settlement systems, insider trading etc.
The new regulation regards in synthesis the new
procedures related to membership, listings rules,
trading, clearing and settlement of the transaction of
securities which are to be traded on the TSE floor.
The new Regulation of TSE, has been prepared and
adopted in accordance with the principal rules,
generally accepted by the European capital markets:
it aims to protect investors by enforcing financial
disclosure for the listed companies, establishing
strong principles of corporate governance among the
listed companies, demanding for the implementation
of international accounting standards, preventing the
use of insider trading information etc.
The license empowers TSE “To operate as a
securities market for the trading of Government /
Corporate Debt Securities and Capital securities” with
no time restriction. This was a big event for TSE, since
for the first time in its history TSE acts as an organized
securities market on an unlimited time - base, after
several periodical - limited licenses since 2002.
Up to now, TSE records six licensed members, three
commercial banks and three private companies,
which offer brokerage services for investors.
FUTURE OUTLOOK
Activating the securities market as a common trading
platform for several financial instruments, will be the
strategic objective of the TSE during 2009.
Achievement of such an important goal shall be
carried out through practical implementation of the
strategic alternatives pointed out within the TSE
Development Strategy. The activity of TSE during 2009
will be mainly focused in:
• The approval of TSE Development Strategy in the
Government’s Economic Policy Committee as well as
the implementation of the Action Plan as an integral
part of this strategy;
• Working closely with and assisting in the
continuance of domestic top level businesses, TSE
members, etc. to make them aware of advantages the
securities market may offer them as well as providing
these stockholders with necessary information, in
order to be listed at TSE,
The municipal bond, a new trading instrument has
been presented in the new Law” On local
borrowings” approbated by the Albanian Parliament
with no.9869, dated 02.04.2008.
The law, with assistance from the USAID agency,
aims to help the municipalities on their efforts for
sustaining economic growth and for a better local
government. Furthermore it enables municipalities to
borrow loan funds for their actual needs and in case
of emergencies. Another attractive form presented for
the local borrowers are the municipal bonds which
represents an attribute instrument in case they are to
be traded on TSE floor.
The new law on Entrepreneurs and companies has
been prepared and adopted with the EU recent
legislation, in regards with the organization and
functioning of trading companies, especially of
anonymous companies, by defining clearly and
precisely the management bodies of these
companies, the rights and obligations of the
shareholders assembly, of the supervisory bodies
and administrators, terms and conditions for the
increasing and decreasing of the shareholders equity
etc. Elaborated in accordance with European
standards and in coherence with the new Law “On
securities”, this Law aims to fulfill and enforce the
legal and regulatory frame of the companies, paving
the way for these companies to be listed in the stock
exchange.
• Bilateral negotiations with Albanian Government
towards the inclusion of TSE in the privatization
process of the state-owned enterprises (SOEs). These
negotiations will cover identification of potential
strategic and non-strategic state owned companies,
which can be privatized through IPO,
• Negotiations both with the Albanian Government
and the Ministry of Finance towards the assignment of
TSE, by MoF, as Government’s agent in organizing
primary auction for long-term public debt securities,
•Negotiation and cooperation with both, MoF and
Albanian Financial Supervisory Authority towards the
compilation of legal and fiscal incentives, which are
deemed necessary to encourage private companies
to raise their capital through IPOs and TSE listing,
• Performance of a marketing campaign, in full
compliance with the marketing program compiled by
TSE with a final objective to attract domestic business
at exchange listing;
• In cooperation with AFS, carrying out of a continued
public education & information campaign regarding
the securities market and advantages that provides its
use;
• Improvement of information technology at TSE in
order to make it possible to provide the market with
an appropriate Electronic Trading System for
securities;
• Keeping fruitful cooperation with institutions in the
region, regarding the exchange of experiences and
staff training, targeting further improvement of human
resources capacity within the filed of securities
market.