Azerbaijan, Baku, 28 August / Trend corr. I.Khalilova / Lower growth rate of the Azerbaijani banking system affects activity of the stock market, which reduces opportunities to raise turnover of exchange deals to AZN 10bln at the Baku Stock Exchange (BSE) in 2008, Khayal Abdinov, the head of the BSE said on 27 August.
At the beginning of 2008, the National Bank of Azerbaijan (NBA) urged banks to pursue careful policy taking into account estimations of all elements of situation at the market. He urged banks to establish institutional platform until the increase in assets and operations. At present, the Azerbaijani banks manage assets by AZN 150mln-200mln on average, respectively, their management-risks, capital adequacy and corporate management system should meet the best standards, the NBA said.
"It is difficult to forecast volumes of exchange deals in current situation, but we hope that it will be possible to increase them to AZN 8bln by the end of 2008 as a result of intensification of operations in the exchange in September," Abdinov said.
In 2007, total turnover of exchange deals on all instruments at the BSE made up AZN 5,483.762mln, which is by 394.94% more than the volume of operations in 2006. On 1 August in 2008, exchange turnover amounted to AZN 4,995.209mln, which is by 243.39% more than the figure of the same period of 2007.
The head of the stock does not see any necessity to correct forecasts. It was expected that profit of the exchange would exceed AZN 1mln in 2008, according to these forecasts. However, the current slackening at the stock market will be reflected in income of the exchange, he believes. Despite of increase of exchange operations as compared to 2007, profit index was forecasted at the same level, which is connected with expansion of expenditure items.
"Shareholders of the exchange decided to increase expenditures to develop the stock market," Abdinov said.
However, there are no plans to increase capital of the exchange (the authorized capital was formed at AZN 1.140mln level).
In 2008 main aspects of the exchange work includes to establish stock indexes, to upgrade commercial system, to involve issuers and foreign investors in the Azerbaijani securities market. At present the US, the English and the Russian investors participate at the stock market and they invest not only in corporate bonds and shares, but also state securities.
"In 2008, work will be strengthened in this direction and some investors will visit the exchange to get familiar with BSE by the end of September, Abdinov said. We want to involve them in the Azerbaijani stock market."
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