Azerbaijan will define strategic goals of securities market development

Business Materials 27 November 2010 11:33 (UTC +04:00)

Azerbaijan, Baku, Nov. 27 / Trend I.Khalilova /

The Azerbaijani State Securities Committee will develop in 2011 the State Program on Securities Market Development for 2011-2020, Committee Chairman Rufat Aslanli said.

"Azerbaijani President Ilham Aliyev tasked the State Committee to develop the state program in his decree on approval of the 2011-state budget," Aslanli said. "The State Committee has already begun work on preparing the program."

The international experts also may be involved in this process, he said.

The Committee has already begun to develop a medium-term strategy for the securities market development with support of the World Bank. Under this project, the country's securities market has been fully assessed with the participation of international experts and a relevant document that defines the action plan was prepared based on this assessment. In October, Aslanli said, Baku hosted an extended discussion of the document with the participation of representatives of the economic block of the government.

Aslanli informed about the current state of the country's stock market, whose activities continued on the backdrop of a soft monetary policy and the volatility of structural factors within 10 months. During the report period, the corporate securities market has demonstrated growth exceeding growth in the country's economic and financial sector. The volume of transactions with corporate securities rose by 7.4 percent over the same period last year, primary and secondary corporate bond market grew by 2.6 times, bonds denominated in foreign currency - 3 times.

He said the corporate securities' portfolio hit 380-390 million manat today. The share of transactions with corporate securities rose from 11 percent in the total volume of securities transactions in 2009 to 25 percent in 10 months of 2010.

The emergence of six new corporate bond issuers, four of which issue the bonds for the first time, in 2010 also affected the growth of the market. In addition, the volume of AMF bonds also increased in the market.

"Today, the corporate bonds market observes stability. In general, a definite group of shareholders has been formed on the corporate sector. Their number hits 100,000, 10-15 percent of which so far demonstrated the greatest activity, which form its portfolio of securities. In 2010, the companies mainly increased its capitalization, and no new joint stock companies have been created this year, respectively there was now proposals to the securities market," Aslanli said.

The country has 1,500 joint-stock companies.

The country observed an activity of local investors, who increased investment portfolio in the securities market by 52 percent - to 328.5 million manat, since early 2010. They mostly interested in state and corporate debentures, he added.

"The local investors compensated a significant part of the loss of the market when foreign investors left the market of government bonds in 2009. In particular, last year foreign investors sold government securities worth $ 170 million and 120 million manat issued in Azerbaijan amid the crisis in global financial markets," Aslanli said.

An increase of return on government bonds and notes of the Central Bank was observed in January-October 2010 as a result of increased activity in the stock market, Aslanli said.

If yield on the government short-term bonds for a period of 35 days was 1.15 percent for a long time, it reached 1.46 percent from August. But, under the influence of supply and demand yields on them stabilized at 1.42 percent. T-bills for a three-month yield increased by more than 70 percent and now stand at 2.46 percent, six-month securities - 2.99 percent.