FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
FEDERATION OF EURO-ASIAN STOCK EXCHANGES
İbrahim Turhan
President of FEAS
The world economy expanded at a rate of 5%
in 2010 and is forecasted to grow by 4,4% in
2011. Emerging economies have contributed
most (7,1%) to the economic growth and
are expected to keep on leading the global
recovery. While strong domestic demand
and capital inflows have been the most
influential factors fuelling growth in emerging
economies, inflation risks arising in commodity
and food prices have appeared on the scene
exerting pressure on policy makers. Advanced
economies have experienced moderate levels
of recovery in 2010, with double dip recession
fears exacerbated in the mid year easing down.
In such an environment, the importance of
cooperation and coordination among stock
markets and regulatory authorities is once
more underlined. Euro-Asia Region uniting
frontier markets can be a leading model for
integrated markets creating a common shield
for economic turbulances while trading the
mutually beneficial products.
The regulatory authorities focus more on
managing risk and creating an integrated
margining system and encourage investors
to trade on organized exchanges. The
improvement of trading technologies also
facilitates the exchanges to act in coordination
and to initiate new common projects such as
common trading platforms. In this perspective,
I believe that standing together may give us
the chance to turn the global crisis into an
opportunity for our markets. Within this context,
the electronic connectivity and direct market
access alternative that may be created among
our member exchanges seems rational. In this
approach, each participating exchange will
keep its entity and stocks will be traded in the
home country stock exchange, creating further
liquidity in home markets.
In its seventeenth year of operation, FEAS
accomplished some noteworthy events such
as implementation of the Dow Jones FEAS
Indices. The initial Dow Jones FEAS indexes
were launched on June 5, 2009. Three indexes,
one composite, and two regional sub-indexes,
measures the performances of companies
across the Euro-Asian region. The Dow Jones
FEAS indexes are designed to underline index-
linked investment products such as funds and
structured products.
Euro-Asia Region uniting frontier markets
can be a leading model for integrated
markets creating a common shield for
economic turbulances while trading the
mutually beneficial products.
On November 2, 2011 Dow Jones Indexes and
the Federation of Euro Asian Stock Exchanges
(FEAS) announced the launch of the first
blue-chip index derived from Euro-Asian stock
exchanges, the Dow Jones FEAS Titans 50
Equal Weighted Index.
An equal-weighted measure of the 50 largest
stocks traded on FEAS-member exchanges,
the new gauge is designed to serve as the
basis for financial products such as funds and
structured products.
The Dow Jones FEAS Titans 50 Equal Weighted
Index becomes the fourth member of the Dow
Jones FEAS Index family; started in 2009,
the index series measures the performance
of companies across the Euro-Asian region.
Earlier this year, the Bucharest, Palestine, Egypt
and Kazakhstan exchanges were added to the
Dow Jones FEAS Index universe, pushing the
current total to 16.
The index universe is defined as all stocks
in the Dow Jones FEAS Composite Index.
Exchanges represented in the index are:
Abu Dhabi (UAE), Almaty (Kazakhastan),
Amman (Jordan), Banja Luka (Bosnia and
Herzegovina), Belgrade (Serbia), Bucharest
(Romania), Cairo (Egypt), Istanbul (Turkey),
Karachi (Pakistan), Manama (Kingdom of
Bahrain), Muscat (Oman), Nablus (Palestine),
Sarajevo (Bosnia and Herzegovina), Skopje
(Republic of Macedonia), Sofia (Bulgaria) and
Zagreb (Croatia).
The ranking is calculated by weighting each
stock’s float-adjusted market capitalization at
60%, sales/revenue at 20% and net income
at 20%. The top 50 stocks by final rank are
selected as index components.
The index is equal-weighted, with each
component’s weight set to 2%. Weights are
reviewed on a quarterly basis, returning to 2%
using price-based weightings. And the index
components are reviewed annually in May.
As mentioned above, the calculation of the
Dow Jones FEAS Titans 50 Equal Weighted
Index began on November 2, 2011, with real
index history available daily from this date
forward. Back-tested historical data have been
calculated daily back to December 31, 2004,
the date at which the index base value was set
at 1000.
During 2011, FEAS initiated the On-Site Training
Program where 10 member exchanges have
applied to send their collegues for a 2 week
program, hosted by Istanbul Stock Exchange.
Also, the Executive Committee Meeting and
Working Committee Meeting held in Ohrid,
Macedonia in May; the 5th and 6th. FEAS
General Assembly Meeting and Executive
Committee Meeting held in Almaty, Kazakstan
on September 2011. Also FEAS initiated the
On Site Training Program where 10 member
exchanges have applied for a 2 weeks training
in Istanbul, sponsored by Istanbul Stock
Exchange, Takasbank,TSPAKB and MKK.
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
seminars held by the FEAS Training Center,
updating and revising e the FEAS movie and
the joint ISE/FEAS projects with international
associations and organizations such as the
UNPRI, World Federation of Exchanges (WFE)
and other International Organizations.
I also would like to take this opportunity
to extend my heartfelt thanks for their
contributions to Finans Asset Management, Is
Investment, Deutsche-Beurse, Nasdaq OMX,
Tayburn Kurumsal, and Bloomberg for making
this publication possible. We hope that you will
take a moment to visit our contributor section
in 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 16th year, we
look to the future with a renewed sense of
purpose and a detailed strategy for achieving
our goals.
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