BRIEF HISTORY

The Baku Stock Exchange (BSE) was established as a result of the initiative of a group of business people of Azerbaijan - mainly leading bankers. BSE is organized in the form of closed joint stock company with 18 shareholders. BSE began its operations on February 15 2001. The general shareholders' meeting is the supreme authority of BSE. The general shareholders' meeting elects members of the Board and the Supervisory and Financial Control Committees. The Supervisory Council of BSE maintains control over the management of the Exchange and reports to the shareholders at the annual shareholders' meetings.

The trading floor of BSE is equipped with 30 computerized membership seats. The shareholders of BSE are automatically granted a seat provided that they hold brokerage and/or dealership licenses issued by the State Committee for Securities. Non-shareholder members of the Exchange are licensed companies and individuals that comply with the BSE membership rules, maintain high standards of business conduct and pay their membership fees.

SHAREHOLDERS OF BSE

The shareholders of BSE are local and foreign banks, investment and consulting companies and one stock exchange. The BSE shareholders are entitled to participate in the management of the Exchange in the order determined by the Law and the Charter of the Exchange, receive information about the operations of the Exchange from Supervisory Council, Financial Control Committee, Management Board, other divisions of the exchange, examine accounting records and other documentation, take over the assets of the exchange (in the form of cash or property) remained after all the settlements with the creditors in the case of liquidation, give up their shares in the capital of the Exchange in the order foreseen in the legislation and the Charter of the Exchange, require examination of operations of the Exchange, put forward proposals for the consideration of the officials of the Exchange, receive full and detailed information on the operations of the exchange, its property, profits and losses.

INSTRUMENTS TRADED

State bonds
Issuer - Ministry of Finance
Maturity period - up to one year
Face value - 1 million manats (approximately USD 200)
Main participants - banks

Corporate stock
Issuers - privatised companies, commercial banks, private companies

Repurchase agreements (Repo) on state bonds

Market operator - National Bank of Azerbaijan
Main participants - commercial banks

Current Repo rates

Term of Repo (days)	Rate
3	8.00%
7	10.00%
15	12.00%

Comparative statistics

Categories	January-June 2001 (thousand USD)	January-June 2002 (thousand USD)
Trading volume at state bonds market	52 795	60 060
Trading volume at corporate securities market	316	815
REPO trading with state bonds	N/a	1 145

 

PRACTICES AND PROCEDURES

Trading

Days	Monday-Friday
Hours:	Pre-opening Trading sessions 09:15-11:0011:00 - 15:00
Currency	AZM
Real time information	last price, last volume, total volume

 

Clearing

Period	T+0 - 15:00 - 16:45
Clearing	Netting
DVP	Full
Clearing institution	BSE owned
Custodians	BSE Depositary, national Depositary Centre

 

Minimum listing requirements

Years of business activity	2
Shareholders equity	USD 1 million
Minimum # of shareholders	500
Minimum years of positive financial results	2

 

FUTURE OUTLOOK

The primary objective for the current and the following year is to create an environment conducive to the increase in liquidity of the corporate securities market. Work in this direction is carried along the following lines: 

1. Large-scale PR-campaign of BSE with the purpose of raising general public awareness and attracting potential issuers and investors to the stock exchange; 
2. Increasing the involvement of the Exchange members in the corporate stock market;
3. bringing forward proposals relating to the improvement of legal documents regulating the market.

The rise of the corporate stock market is expected upon the completion of the second stage of the state privatisation program which is currently underway.

Baku Stock Exchange
President: Mr. Salim Kriman
19 Bul Bul avenue
Baku, 370070
Azerbaijan

Tel: (99412) 989820
Fax: (99412) 937793
Contact person: Mr.Teymur Safaraliyev
E-mail: info@bse.az
Website: www.bse.az

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