FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2013
BAKU STOCK EXCHANGE
2013 has been a positive year in terms of
the trading volumes and development in
the corporate sector.
Fariz Azizov
Chairman
2013 has been a positive year in terms of
the trading volumes and development in the
corporate sector. the BSE has ended the
last year with 11 bn 467 mln USD. of total
turnover which is only 400 mln USD less than
the record high registered in 2008. The big
portion of the BSE’s turnover is comprised of
the deals on the government securities market,
nevertheless, understanding the role of the
stock exchange as a barometer of the whole
economy, thoughout the year we have been
continusly in touch with the local business
sector educating them about the opportunities
and benefits of the capital market and revealing
their needs that might be addressed via the
stock exchange. But, as mentioned, this is an
ongoing process, especially in such young
economies as ours, and the BSE will continue
its marketing efforts aiming to raise the share of
the corporate sector in the composition of the
Azerbaijani capital market.
The year of 2013 was symbolical with
the implementation of the Capital Market
Modernization Project funded by the
government of Azerbaijan, World Bank and
State Secretariat for Economic Affairs of
Switzerland (SECO) and managed by the
State Committee for Securities of Azerbaijan
Republic. The main objective of this 3-year
project is to increase the use of equity and
HISTORY AND DEVELOPMENT
After gaining it’s independence, and embedding
property and ownership rights in the overall
legal system, Azerbaijan made it first step
toward developing the capital markets by
adopting the Law on “Securities market and
stock exchanges” on 24 November 1992. On
January 13 of 1995 the Law on “Investment
activity” became effective. On September 29
of 1995 the government adopted the first State
Privatization Program for the next three years
which paved the way for the establishment of
the necessary capital market institutions. As a
result, by the end of 1998 28 thousand small
organizations and more than 800 medium and
large enterprises were successfully privatized.
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corporate debt as financing and/or investment
instruments through the adoption of an effective
capital markets regulatory framework and
infrastructure. As one of the beneficiaries of the
Project and with the combination of the joint
efforts, we expect the first quintuple of national
companies to come to listing on the BSE within
the following 1.5-2 years. by the stock exchange. We will implementing
Listing Advisory Program aimed at increasing
the demand for investment capital and/
or supply of investment opportunities and
securities on the Baku Stock Exchange. The
goal is to increase significantly the trading
volumes with the corporate securities within the
next 3 years
Concluding the above said, we can stress
that 2013 will be the year of marketing and
sales for the stock exchange, nevertheless we
will continue our research on other priorities
such as establishment of data vending,
modernization of IT and operational capacities
and improvement of internal corporate structure
and personnel skills. Although the BSE exchange itself is relatively
new in comparison to stock markets in
the developing world, it has experienced
quite a degree of sustained growth since
its establishment. Baku Stock Exchange is
taking a breakthrough step towards the aim
of developing capital markets in Azerbaijan by
introducing new trading systems and setting
better standards. We are working on a number
of important projects like conducting trade of
foreign securities in our country, and bringing
new products such as ETF class of assets etc.
In this regard, 2014 is connected with our high
expectations. We have started to implement
Listing Advisory Programme which is helping
companies to raise capital through issuing
shares and bonds. It is also encouraging to
note that the preparation process to hold the
first IPO - Initial Public Offering on the Baku
Stock Exchange is also underway.
2012 has been the second highly performing
year in terms of trading volumes in the history of
the Baku Stock Exchange since its inception in
2000. After a very successful year in 2011, the
BSE was able to achieve another 7% increase
in total volume of the transactions in 2012. We
have been continuously in touch with the local
business about the opportunities and benefits
of the capital market and developing efficient
funding platform for their investments.
Concluding the all above, I have to emphasize
that 2013 will be the year of active sales efforts With best regards,
The need for proper regulation of the capital
markets paved the way for the establishment
of the State Committee for Securities (SCS)
under auspices of the President of Republic
of Azerbaijan on December 30, 1998. The vital
part of the capital markets development was
establishment of the Baku Stock Exchange
(BSE) with the help of local and international
financial organizations most of which became
the shareholders of the company. The first
securities to trade on the organized stock
exchange were treasury bills which were issued
by the Ministry of Finance. The first placement of the stocks and corporate
bonds in the organized stock exchange was in
2003 and 2004 respectively. Since 2004 trading
in treasury bills has grown 7.9 times, trading
in central bank notes has grown 9.4 times,
trading in corporate bonds has grown 52.2
times, and trading in stocks has grown by 20.8
times at the end of 2013. Currently Closed Joint
Stock Company “Baku Stock Exchange” has
20 shareholders. Throughout the period since
inception, the BSE has managed to establish
a well-organized securities trading platform
effectively linked with other market participants.