ANNUAL REPORT JUNE 2010
FEDERATION OF EURO-ASIAN STOCK EXCHANGES
BAKU STOCK EXCHANGE
The efforts described above all are being
done with the belief into the recovery soon
to come and positioning ourselves to
benefit from it.
Khayal Abdinov
Chairman
Till the middle of 2008 the world economy was
in a growing mode the effects of which were
also felt at Baku Stock Exchange, by that time
our turnover grew multiple times. But starting
with 2009 we sharply felt the effects of the
global financial crisis. If in the past the growth
was providing substantial quantity of supply,
with the crisis both buy and sell sides lowered
their appetites, and new risks became
apparent. Reaction of the exchange was to
reconsider its strategy, and now we more
focus on the quality of the issuers and
investors than quantity, and reevaluating the
risks of the market.
HISTORY AND DEVELOPMENT
The establishment of a stock exchange was a
necessary step in the creation of a modern
stock market in Azerbaijan. Due to its
geopolitical location Azerbaijan is an important
regional center of business activity. In this
respect the availability of a stable and
developed securities market plays a substantial
role in the raising of investors' confidence in the
economy of Azerbaijan and the region.
The shareholders of the BSE are leading Azeri
and foreign banks and investment companies.
The supreme decision-making authority of the
Baku Stock Exchange is the General
Shareholders Meeting.
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The unveiling events around the world forced
us to review our strategy and risks. We started
by improving the listing rules; tightening on the
requirements on corporate governance and
providing more safety mechanisms for minority
shareholders. Also in 2009 with the help of
major market participants we started the
process of reshaping of the local capital
market architecture. We will continue this effort
this year and possible in 2011. As a part of the
same effort, the BSE will further strengthen its
corporate structure, continue to modernize IT,
and of course will be developing new
products. The globalization does not pass us
by, and as a result, we are investigating the
opportunities of cross and dual listing with the
exchanges.
The trading floor of the BSE is equipped with
30 computerized trading stations, 18 of which
belong to the shareholders of the Exchange.
The other 12 are available for new members.
Legal bodies (banks, investment funds, broker
firms) involved in professional activities in the
securities market with special license from the
State Committee for Securities under the
auspices of the President of the Azerbaijan
Republic can become members of the BSE.
The efforts described above all are being done
with the belief into the recovery soon to come
and positioning ourselves to benefit from it.
Taking the opportunity, I would like to thank the
management and members of FEAS for the
continuous support to our exchange and
being responsive to the various queries
coming from our side.
FUTURE OUTLOOK
The BSE plans for 2010:
• to strengthen the internal corporate structure;
• to modernize its IT sphere;
• to improve internal risk management
mechanisms
• to continue promotion of listing.