Category: News from Issuers

The opening of the first private securities exchange in Albania will be a window for all foreign investors.  The president of US Chamber of Commerce Mark Crawford said in an interview with TV SCAN that the effects of the opening of a securities market will be positive for the business, and will also change the public’s mentality. According to him, the government can also contribute to Exchange development by starting with listing of state-owned companies.

“We are playing football in a field, were not using all the options that are normal for a capitalist economy. If you have money, it means you have liquidity therefore you need some means to mobilize this. While the funds in Albania are limited to banks, then the economy will not flourish. I believe the government can help by listing a few companies”, Crawford told SCAN.

The Albanian Financial Supervisory Authority licensed the first private securities exchange ALSE in July 2017, while its opening is expected to be in the coming months. This is seen as a very important development for the Albanian financial market, as it enables businesses to raise capital by attracting new shareholders. On the other hand, investors will have the opportunity to invest in a regulated market that offers complete confidence and transparency.

The Albanian Financial Supervisory Authority (AFSA) approved last week the prospectus for the issuance of corporate bonds by Credins Bank.

According to the decision, Credins will issue new corporate bonds for amounts of 2 million EUR, 500 thousand USD and 400 million ALL.

According to the prospectus of the issuer, the corporate bonds will be convertible into shares of Credins Bank. This implies that the buyer may choose to receive bank shares instead of the bond repayment.

Issuance of corporate bonds is a practice that Credins Bank has been pursuing for five years now, becoming the first company in the Albanian market to apply borrowing through financial market instruments.

Until now, issuance of corporate bonds was made with a private placement and only offered to buyers selected by the bank. This is mainly as a result of not having an Exchange in Albania that would allow the issuance of securities with a public offering and their trading in an organized market. However, the growth of corporate debt issuance is an indication that the stock market is becoming more and more a need for the financial market. In the last years, besides Credins Bank, Fondi Besa and Balfin Group have also issued debt instruments through a private placement. The market is waiting for the licensing of the first private securities exchange in Albania, as the application has been submitted to the Albanian Financial Supervisory Authority almost a year ago.

Balfin Group, the largest holding in the country, will offer for the first time short-term financial instruments (commercial papers), 2 percentage points higher than government Treasury Bills. First Investment Bank is the bank and the custodian, who will carry out the collection and payment of funds. BKT has purchased the first receipts of 70 million ALL. How it works and how much is the risk?

Just as the government issues T-Bills or T-Bonds to cover its liquidity needs, private companies in Albania have begun issuing their debt instruments. Balfin Group, the largest holding in the country, will provide for the first time short-term financial instruments, which means that the group will make a promise for short-term payments, while the buyer will receive at the maturity the invested money and an interest that is 2 percentage point higher than that of T-Bills (currently 12-month bond interest rates are 1.2%, 6-month 0.95% and 3-month 0.9%). The strategy is for Balfin to issue long-term debt instruments and in the foreseeable future to be listed on the stock exchange, where there will be even greater opportunities for providing alternative means not only of financing but also of investment. The group sees listing on a regional stock exchange as a must. Balfin Group had an annual turnover of about 500 million EUR in 2015, with investments in over 10 countries around the world.

In the world, rising capital through financial instruments is highly developed for companies, while in Albania they are not used for a variety of factors, such as the lack of a developed capital market, high informality, and relatively low level of company development. But as bank lending is tightened on one hand, and some large groups are developing and seeking more alternatives on the other hand, the first phases of the capital market are being shaped in Albania, although the stock market is still lacking behind.