FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
BAKU STOCK EXCHANGE
2011 has been recorded in the history
of Baku Stock Exchange as the second
highly-performing year with the total
trading turnover of more than US$ 10.7 bn.
Emin Aliyev
Chairman of Management Board
2011 has been recorded in the history of
Baku Stock Exchange as the second highly-
performing year with the total trading turnover
of more than US$ 10.7 bn. Even though the big
portion of this amount has been achieved on to
the government securities market, throughout
the year the BSE continued maintaining
intensive dialogue with the representatives of
the corporate sector for bringing them to the
market. As a result for the first time last year
Bakcell Ltd., one of the leading cellular operator
in Azerbaijan, successfully issued and placed
HISTORY AND DEVELOPMENT
As far back as we could track the history of the
ancient people living between the mountain
ranges of Lesser and Greater Caucasus, on the
current territory of modern Azerbaijan, they have
always enjoyed the presence of international
trading and the culture of deal making was
very well accepted and praised in the area.
But anyone visiting Azerbaijan wouldn’t need
to study history to find the proof of that. It is
enough just to visit one of many bazaars to
be a part of the constant deal making. Once
experienced this you will understand that the
favorable geographical situation of Azerbaijan
was not the only reason why the ancient Silk
Way was passing through the territory of the
country.
Given the above, it is not surprising that in the
early days of Azerbaijan’s independence the
pragmatic leader of the country Heydar Aliyev
envisioned the creation of capital markets
infrastructure – modern day’s “marketplace”.
The vital part of this infrastructure was Baku
Stock Exchange which was established in
October 1st 2000 with the help of local and
international financial organization most of which
became the shareholders of the company.
Currently Closed Joint Stock Company “Baku
Stock Exchange” has 19 shareholders.
PAGE 30
its bonds worth of approximately US$ 50 mln.
on the market.
As in the previous years, the management
of the BSE continued to focus on reducing
operational and activity-related risks as
well as optimizing the internal structure of
the company. We continue to modernize
and improve our IT capabilities and expand
our listing and product bases. In 2011 the
BSE explored the leading risk management
practices and managed to apply them to the
Milestones in BSE’s history
• The Initiative Group for the establishment of
the stock exchange gathered – December
25th 1999
• The first BSE’s Shareholders Assembly –
February 15th 2000
• State Committee for Securities granted an
exchange license to the BSE – July 21st
2000
• The first placement of the short-term
government bonds on the BSE – September
1st 2000
• The official opening ceremony of the
exchange – October 1st 2000
• Election of the BSE to the Federation of
Eurasian Stock Exchanges – November
2nd 2001
• Introduction of first repo to the market –
November 22nd 2001
• The first transaction in corporate bonds on
the exchange – January 26th 2004
• The first placement of corporate bonds
denominated in foreign currency – March
5th 2004
• The first equity trade conducted via the
exchange – April 15th 2004
• The placement of the Central Bank’s Notes
for the first time on the BSE – September
14th 2004
• Introduction of the interbank repo instrument
to the market – May 24th 2006
• The first placement of the mid-term
government bonds on the exchange – March
16th 2009
everyday activity of the stock exchange by
establishing a separate risk management unit
within the BSE’s organizational structure.
Adoption of the State Program for Securities
Market Development for 2011-2020 and
respective legislation in the field of investment
funds last year gives us any opportunity to
believe that the year of 2012 will stay in our
memories as a period of substantial growth of
the corporate sector in the exchange’s turnover.
• The placement of the bonds of Azerbaijan
Mortgage Fund on the BSE – June 16th 2009
• Introduction of the new trading system with
remote access capabilities for the members
– July 2nd 2009
• Effective date for the new listing rules –
August 1st 2009
• International conference dedicated to the
newly adopted listing rules – September 29th
2009
• Starting of the “Capital markets training”
project with the help of EBRD – January 21st
2010
• Celebration of 10th anniversary of Baku
Stock Exchange and conducting of an
international conference on “Collective
investments: global experience and
opportunities” – September 29th 2010
FUTURE OUTLOOK
As a part of the overall strategy for the
development of BSE and capital markets of
Azerbaijan, in 2012 the exchange will continue
focusing on some of the previous issues as well
as trying to tackle new ones:
• to continue promotion of listing as well as
create new market tools;
• to continue modernization of IT and trading
infrastructure;
• influenced by market trends to further
optimize the organizational structure of the
exchange