TIRANA (Albania), July 13 (SeeNews) – Albania will offer 4 billion leks ($36 million/32 million euro) worth of five-year Treasury notes at an auction on July 15, central bank data shows.

The government securities have a maturity date of March 26, 2025, the data shows.

At the last auction of five-year T-notes held on May 21, the finance ministry sold 4.4 billion leks worth of government securities. The accepted coupon rate was 3.7%, unchanged in comparison with the previous auction of five-year government securities held on March 24.

(1 euro = 124.273 leks)

Source: SeeNews

The value of corporate bonds issued through private placement by Albanian companies reached the level of 7.5 billion ALL (around 62 milion Euro) at the end of last year. Based on data from the Albanian Financial Supervisory Authority (AFSA), the value of these instruments is about 0.3% of Gross Domestic Product. About 53% of the issued corporate bond value is nominated in lek, 38% nominated in euro and 3% nominated in US dollars.

Legally, corporate bonds issued by private placement can be offered to institutional investors and to a number of up to 100 individuals. Last year, the AFSA approved five prospectuses for private corporate bond issues for four issuers, including two banks and two microcredit institutions.

Meanwhile, in the first half of this year, AFSA has approved four other issuance prospectuses, for a total value of 11.5 million euros.

Since 2011, companies in Albania have successfully issued corporate bonds for more than 110 million euros. Until now, in the Albanian capital market, the issuance of corporate bonds has been done with a private placement, also due to the lack of a securities market. AFSA underlines that, due to their nature, private placement of corporate bonds do not create liquidity in the market.

But, from February 2019, the issuance and trading of the shares of private companies can be done in the Albanian Securities Exchange (ALSE). The public offering would make these instruments tradable and liquid, creating the possibility of selling them at any time or using them as financial collateral for borrowing.

The use of financial instruments to rise capital through listing to the stock exchange needs an initial incentivation and the experience of the countries of the region has shown that this incentive should come from the public sector.

Unfortunately, in Albania the government has not taken concrete initiatives to activate the capital market yet. However, in recent months the Ministry of Finance and Economy is studying the idea of lending to public companies through bond issuence and no longer exclusively through banking loans.

Bank of Albania/All Rights Reserved

TIRANA (Albania), June 26 (SeeNews) – Albania’s finance ministry will offer 8 billion leks ($72.2 million/64.3 million euro) worth of one-year Treasury bills at an auction on June 30, central bank data shows.

The T-bills mature on July 1, 2021, according to the calendar of upcoming auctions of government securities published by the central bank.

Some 2.07 billion leks worth of the T-bill offer is reserved for the central bank.

The finance ministry sold 8.69 billion leks worth of government paper at the last auction of one-year T-bills held on June 16.

The average weighted yield edged down to 1.93%, from 2.04% at the previous auction of one-year T-bills held on June 2, according to auction results published by the finance ministry.

(1 euro = 124.500 leks)

Source: SeeNews

Albania has entered the international markets with a Eurobond of 650 million euros, with an interest rate of 3.62%. The previous Eurobond, that of 2018, of 500 million euros had a relatively lower interest rate, at 3.55%. According to data provided by the Reuters platform, this debt has not been issued yet; this will happen as planned on June 16.

The Eurobond, meanwhile, is currently listed only on the Irish Stock Exchange. The maturity is 7 years and is expected to expire on June 16, 2027. In terms of debt subscribers, they turn out to be: Citigroup, JP Morgan, Raiffeisen International and Sanpaolo Investment Base (IMI SPA).

Debt signatories are financial institutions that undertake to buy outstanding debt and then resell it.

SCAN

SKOPJE (North Macedonia), May 28 (Seen News) – North Macedonia has issued a six-year Eurobond worth 700 million euro ($770.9 million) on May 27, the finance ministry said.

The Eurobond bears an interest rate of 3.67%, the second-lowest after the interest rate of 2.75% on the Eurobond issued in 2018, the finance ministry said in a statement on Wednesday.

Investor demand for the new Eurobond, the country’s seventh so far, was five times higher than the amount issued.

North Macedonia will use the funds raised from the new Eurobond issue, together with loans from the International Monetary Fund (IMF), the World Bank and the European Union, to fully cover its financial needs for this year, the finance ministry said.

The government expects to close 2020 with budget deficit equivalent to 6.8% of GDP. Payments on the country’s debt maturing this year amount to 705 million euro, the finance ministry said.

Source: SeeNews

SOFIA (Bulgaria), May 21 (SeeNews) – The European Bank for Reconstruction and Development (EBRD) said on Thursday that a new report commissioned by the lender calls for substantial reforms of debt capital markets in eight countries in Central and Southeast Europe.

The report examines the markets in Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro, North Macedonia, Romania, Serbia and the Slovak Republic through standardized models judging the cost-effectiveness and efficiency of bond issuances, the EBRD said in a statement.

Among the researched markets, Romania ranked first in terms of cost-effectiveness, while Bulgaria performed best in terms of issuance efficiency.

The report makes several suggestions for improving the local debt markets, including the introduction of caps on scalable fees, tax incentives for investing in debt securities, and prospectus templates which can be used as benchmarks.

The report also recommends limiting the use of expensive trading systems and calls on government debt management offices or central banks to consider providing more consistency and notice to the market to facilitate greater participation from retail investors.

UK consultancy InvestorConnected wrote the report based on 2018 data.

Source: SeeNews

TIRANA- Today, the Albanian Parliament has approved the law on ‘Financial Markets based on Distributed Ledger Technology’. The law aims to regulate the operation of DLT Exchanges, Initial Coin Offerings, Security Token Offerings, Third Party Custodian Wallet Providers and Innovative Service Providers.
The regulatory framework comes as an attempt from the Albanian government to incentivise foreign investments and start-ups in this field by providing a comprehensive and certain regulatory system for them to operate.
The main aspects of this law seem similar to those of the Virtual Financial Act of Malta. However, in a breakthrough development, the law also foresees the provision of a Light Banking Licence for Exchanges and Custodians which will enable the latter to also keep custody of FIAT money, thereby providing a better link between this industry and traditional finance.
In order to address money laundering risks, the law foresees that all operators in this market are subject to AML provisions and are obliged to conduct KYC, due diligence and also periodically report to AML officers.

What is a ‘blockchain’?
In order to describe the main features of a blockchain, we are going to illustrate the functionalities fo the first blockchain, namely the Bitcoin blockchain.
The Bitcoin blockchain – a decentralised public transactions ledger, enabled for the first time in history the possibility of two or more distant, untrusting parties to directly complete transactions without any intermediaries being involved in the process. It does so by incorporating rules designed to incentivise the propagation of legitimate transactions, to reconcile conflicting information and to regularly check the true state of the ledger in an environment where not all transacting parties can be trusted.
In essence, it is a shared public ledger that everyone can inspect but no one controls, thus enabling trusted transactions authenticated by mass collaboration and powered by collective self-interest rather than public authorities or corporations.
In more simplistic terms, the blockchain is a decentralised ledger representing every transaction that has ever been conducted. It offers an opportunity for two or more unknown trust-less parties to transact with each other by establishing a record of who owns what that compels the assent of everyone involved. It is precisely this feature of facilitating secure direct peer-to-peer economic transactions without the involvement of third parties that has led to the blockchain being dubbed as the ‘trust machine’ and its proponents to call for a wider application of this technology in various domains of public and private sector services.
While the usage of the cryptocurrency Bitcoin has gained infamy mainly related to its price volatility and usage to supplement criminal activities, its underlying technology, namely ‘the Blockchain’, offers a great potential for further application across multiple disciplines. For example, in a world where an estimated five billion people are deprived of fully accessible and inalienable property rights the possibility to securely store your property rights in a decentralised incorruptible public ledger may soon alter the ways in which property transactions are conducted in the future.
Another example can be the remittance sector, a ca. 2 billion dollar market in Albania, in which blockchain technology can dramatically lower transaction costs that normally skyrocket to almost 10% of the amount to be sent, into a mere 0.1%.
While the future of cryptocurrencies like Bitcoin and Ethereum is unclear due to its volatility and infamy, the underlying blockchain technology is here to stay.

Source: Tema Online

Investing in the ALSE stock exchange, the money of Albanian citizens who are currently deposits in commercial banks, would boost economic development in the country. Socialist MP Ervin Bushati, during his speech in parliament regarding the draft law “On capital markets, stressed that it is already a functional instrument that can advance Albania’s finances and increase economic performance.

The socialist MP proposes that public companies, such as OSHEE, OST, UKT, etc., be the first to be listed on the stock exchange, as this would significantly improve the services they provide.

A few days ago, interest groups asked the government to take a concrete legal initiative to enable the quotation of public institutions on the ALSE scholarship.

Source: SCAN

The Albanian parliament approved today, on May 14th, 2020 in the plenary session the draft law “On Capital Markets”. The draft law improves the current legal framework and addresses to the dynamic of the of domestic capital market development. The draft law promotes the development and the integrity of capital markets, increases the transparency and investor protection by setting the highest standards. The drafting process of the new law was carried out by the support of World Bank experts, as part of the Project “Strengthening the supervisory capacities of the Albanian Financial Supervisory Authorities: Focused on the development of capital markets”.

The draft law is in accordance with:

  • Markets in Financial Instruments Directive (MIFID II) and other rules in the European Union in the field of capital markets;
  • International Organization of Securities Commissions (IOSCO) principles and guidance’s from European Securities and Markets Authorities.

The main objectives of this draft law are:

  • Protection of investors interests, through adaptation of the highest standards or classification in professional investors, qualified investors, acceptable party or non – professional investors;
  • Adaption of strict requirements regarding the licensing, regulating or supervising the brokerage firms and other capital markets operators;
  • Promotion of foreign investments by attracting foreign brokerage firms to act on the domestic capital markets;
  • The adaption of rules for well-functioning of the market, including the stock exchange;
  • Acknowledging and regulating the activity of other trading platforms, by promoting at the same time the competitiveness between them;
  • Creating and regulating the activity of institutions with importance in the market infrastructure, such as Central Securities Depository or Clearing House;
  • Promotion of market integrity by increasing the transparency requirements for issuers and listed companies, as well as for market operations and institutions.

The new law also foresees the increase of the Albanian Financial Authority competencies to investigate in function of strengthening its supervisory and regulatory framework.

 Source: Albanian Financial Authority

The FESE membership, comprising of Exchanges across Europe, are not immune from the effects triggered by the rapid spread of Covid-19 and its impact on the economic environment. Whilst this situation is not without its challenges for exchanges, it is crucial that the markets remain open.

Regulated stock markets fulfil a social and economic function that must prevail in times of uncertainty.  Exchanges play a key role in providing price formation, transparency and liquidity. Preventing them from fulfilling this role would have a huge impact not just on the economy but society too.

These functions have been put to the test in the past for example during the financial crisis – when other sources of liquidity dried – exchange markets successfully continued to operate. This situation is no different, exchanges should continue to be operational to maintain trust.

FESE Members’ guiding principles remain transparency and objectivity, especially in these times of uncertainty.

European Exchanges will and should continue to remain open at all times to ensure safety, integrity and fairness in a secure and transparent manner.

1 – Technically and operationally: Markets continue to function in an orderly and transparent manner despite the extreme trading conditions triggered by the Covid-19 crisis. The controls and circuit-breakers in place work normally and with the necessary flexibility to meet market demand.  Contingency plans have been activated and will ensure everything is working as it was designed, including in the context of “working from home” protocols.

2 – Orderly functioning of financial markets: The constant news flow results in a continuous revision of investors’ valuations of securities and is generating the need to rebalance portfolios dynamically. It is expected that the current crisis will continue to generate both negative news flow, for example to lock-down decisions, and positive news flow, for example to the impact of significant  government support plans. Investors  need to adapt to the changing economic circumstances and the controls in place at trading venues are even more important in such volatile market conditions with  circuit-breakers  allowing investors to absorb new information. More generally, the pricing of risk needs to remain transparent, accessible and reliable across asset classes to allow investors to value portfolios and make informed investment and hedging decisions under these volatile conditions.

3 – Contractually: The closure of markets would trigger all kinds of procyclical contractual clauses in a very wide range of financing and even operational contracts These  potential and open-ended consequences could generate an unpredictable number of defaults. Derivatives contracts in particular are seen as reliable with observable reference prices allowing for an  orderly expiry and settlement process. These instruments are often used as proxies or hedging tools for many related OTC markets, for example credit markets. A closure of the lit markets would likely have a material impact on the functioning of a broad array of OTC markets given the removal of key hedging tools that would render broader risk management extremely challenging.

4 – Regulatory and litigation consequences as well as effects on smaller investors: A closure of markets would trigger the massive expansion of all sorts of off-market bilateral arrangements outside of transparent trading venues and without the protections prevalent on trading venues. All investors would be impacted by such a situation, but small investors would be worst hit by a move to such opaque arrangements concluded between professional investors as they  would only be able to adjust their positions at the re-opening of the reference trading venues.

Closing the markets would not change the underlying cause of the market volatility,  it would remove transparency of investor sentiment and reduce investors access to their money; all of which would compound current market anxiety and result in a negative decline in investor outcomes.

FESE Members remain attentive to global and European developments and will work towards maintaining a safe, transparent and fair market space in Europe at all times.

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