FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2010
FEDERATION OF EURO-ASIAN STOCK EXCHANGES
The future outlook for our markets seems to
depict that our member markets continue to
provide competitive and viable financing
options to both public and private sectors.
Huseyin Erkan
President of FEAS & Chairman and
CEO of the Istanbul Stock Exchange
After the most severe global recession for
decades, most of the economists now expect
a sustained recovery in the global economy. In
fact, some major economies have exited from
recession in the second and third quarter of
2009 by burst of global monetary and fiscal
stimuli. After contracting by 2.1% in 2009,
global real GDP is forecasted to expand by
3.2% in 2010. Within this context, another
significant expectation is the differential in
economic growth between developed (2.1%)
and emerging economies (5.7%). Yet,
conservative recovery forecasts still reflect
concerns about credit availability and the
medium-term fiscal outlook in the developed
countries. As regards to the average GDP-
weighted public-debt-to- GDP ratio in
developed markets and emerging markets, it
is obvious that many developed countries
have moved into unchartered territory over the
past couple of years. While the emerging
countries’ public debt stock climbed to around
44% of GDP in 2009 from just 35% in 2006,
the developed countries debt ratio
skyrocketed from less than 80% to around
95% of GDP .
Even though developed countries felt the
burden of the crisis most heavily in 2008, the
domino effect of the crisis on the developing
markets of FEAS were felt in 2009. During
2009, the FEAS region’s financial markets
have performed in excess of world markets
when you compare the performance of the
FEAS Index to that of the Dow Jones World
Index (i.e. 52% vs. 30% increase respectively).
While the market capitalization of the FEAS
region has increased by 35% in 2009, the
average daily trading volume is down by
15.3%. (We have included a special section
after the FEAS pages that review the growth of
our markets over the past 15th years.)
On the verge of completing the fifteenth year
of its operations, the FEAS accomplished
some noteworthy achievements such as
implementation of the Dow Jones FEAS
Indexes and production of the FEAS movie.
The FEAS Index is the first benchmark to
measure the performance of companies
across the Euro-Asian region. It covers 95% of
the free-float market capitalization of each
country in the respective index. Actually, three
indexes were launched on June 2009, one
composite, and two regional sub-indices. The
Indices are designed to underlie index-linked
investment products such as funds and
structured products. The FEAS Composite
Index currently includes 375 stocks from 12 of
the 33 member exchanges, including Abu
Dhabi, Amman, Bahrain, Belgrade, Bulgaria,
Istanbul, Karachi, Macedonia, Muscat,
Sarajevo and Zagreb. Our aim is to launch an
investable blue chip index in the forthcoming
years.
During 2009, the FEAS jointly hosted with its
members three meetings and conferences.
These were the Executive Committee Meeting
and Working Committee Meeting held in
Minsk, Belarus in June; the 15th FEAS General
Assembly Meeting and Executive Committee
Meeting held in Budva, Montenegro, together
with the Exchange Traded Products
Conference hosted by STOXX in September;
furthermore in October a meeting of the Post
Trade Affiliate Members of FEAS was held in
Antalya, Turkey. Besides these meetings, the
FEAS Secretariat continues to pursue activities
that will promote the growth of member stock
exchanges operations such as bilateral visits,
workshops and seminars held by the FEAS
Training Center, and the joint ISE/FEAS
projects with international associations and
organizations such as the UNPRI, World
Federation of Exchanges (WFE) and other
International Organizations.
Our renewed commitment to the revised FEAS
5-year strategic plan is also designed to
achieve the objectives as specified in the
mission statement of the Federation and to get
a more vital role in the global market
environment. During the next five years, our
focus will be more on promoting “corporate
governance”, facilitating timely disclosure,
encouraging convergence among FEAS
Members, promoting mechanisms for reliable,
transparent and uninterrupted securities
trading and settlement, creating greater
recognition and visibility for the region’s
securities and investment opportunities,
encouraging the listing of “investment grade”
securities in the respective home markets of
the Region, encouraging foreign investor
participation in Member Markets, promoting
linkages among the Region’s intermediaries,
data vendors, settlement and custody
institutions, exchanges; and also encouraging
cooperation among Region’s Regulators,
promoting and encouraging research activities
and training for FEAS Members and their
personnel and assisting FEAS Members to
increase financial literacy through public
awareness.
I would like to take this opportunity to extend
my heartfelt thanks for their contributions to
Bloomberg, Central Registry Agency, Finans
Asset Management, Garanti Asset Management,
IS Investment, Muscat Securities Market,
NASDAQ OMX, Takasbank, Tayburn Kurumsal
and The Association of Capital Market
Intermediary Institutions of Turkey for making
this publication possible. We hope that you will
take a moment to visit our contributor section
in the FEAS website at www.feas.org and read
their articles in the following pages.
The future outlook for our markets seems to
depict that our member markets continue to
provide competitive and viable financing
options to both government and private
sectors, while enhancing operations through
technology and expanding the services offered
to market participants. We surely continue to
focus on the areas of increased transparency
through investing in infrastructure and
developing regulations to promote stronger
environmental social governance. The efforts
of all our Task Force Members will surely play
a vital role in achieving our objectives through
their commitment and hard work and the
Secretariat for maintaining our cohesive
organization. As we close our 15th year, we
look to the future with a renewed sense of
purpose and a detailed strategy for achieving
our goals.
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