The Albanian Securities Exchange (ALSE) is expected to help attract foreign investors and improve the business climate in the country, the head of the American Chamber of Commerce in Albania, Mark Crawford, said on Friday.

No major American company has come to invest in Albania recently, Crawford said in an interview with local Scan TV.“I hope that with the opening of the stock exchange we will have some investors who will come through it,” Crawford said, speaking in Albanian.He urged the Albanian government to develop policies aimed at attracting foreign investors, starting with the tax relief.

ALSE is a joint stock company licensed by the Albanian Financial Supervisory Authority (AFSA) in July 2017 as the first private securities exchange in Albania. In the first year of activity, the ALSE transactions will focus only on the trading of government securities, AFSA said at the time.

ALSE was founded by three shareholders: Credins Bank and American Bank of Investments (ABI) with 42.5% of the capital each and AK Invest with 15%.

Albanian Securities Exchange started this week a training with licensed brokers on the use of electronic trading system.In an interview with Scan Tv, ALSE CEO Artan Gjergji stated that the securities exchange is in its final stages and will soon start operations.The bourse is expected to start trading Albanian government securities in January 2018.

Last week, Bank of Albania approved several changes to the regulations that enable Albanian Securities Exchange to become a member of the system of security settlement and registration – AFISaR. AFISaR (Albanian Financial Instrument Settlement and Registration) is the central system of settlement and registration of the securities issued by the Albanian government, for which Bank of Albania organizes the auction based on the Memorandum of understanding signed with Ministry of Finance. Communication with AFISaR is based on swift-type messages realized through access on the Virtual Private Network (VPN) or through SWIFT.

The membership paves the way for the beginning of trading operations on the first private Albanian Securities Exchange.

ALSE was brought into being by a group of Albanian financial market professionals backed by three Albanian-owned banks, primarily Credins Bank.

The Albanian Financial Supervisory Authority has given ALSE a full license but with the country lacking a central depository of non-government securities it will have to trade T-bills for a year.

Governor of the Bank of Albania Gent Sejko declared that the banking system in the country enjoys full health and this is an important premise for the full recovery of economic growth.

During his opening speech at the Bank of Albania Annual Conference, Sejko said that the most striking achievement is the reduction of non-performing loans at the lowest levels of the last six years.This reduction is also helping in a positive lending growth.

However, the Governor stressed that the financial market architecture is not complete.The lack of a capital market and other related components increases the banking sector’s pressure to fund the economy.

An important development recently is the opening up of a private securities exchange, expected to begin operations this year.

Governor Sejko once again called on the Albanian public to safeguard from stock market investments through unlicensed brokers, urging investors to trust only regulated and supervised entities.

This year’s Bank of Albania Annual Conference addresses the developments in the banking market and financial market infrastructure, and more specifically, the role of structure, size and market infrastructure in mitigating risks.

The awareness campaign for consumer protection and increased information on the markets under the supervision of the Albanian Financial Supervisory Authority (AFSA) has been relocated today (November 8th) at the Mediterranean University of Albania, where a co-operation agreement was signed.

AFSA Executive Director Ervin Koci underlined that the Authority’s initiative to increase financial education has started by students considering this to be one of the most important target groups in the country’s development.

“Our goal is for young people to recognize the Authority, the markets it oversees, so they can use their knowledge to further the development of the country, by being important players in financial markets,” Koci said.

The president of the Mediterranean University Mr. Anastas Angjeli stressed that “the agreement will not only serve in exchanging experiences but also benefiting from internships where the students can be part of the AFSA.” According to him, “the agreement has in its essence the exchange of information, the development of joint activities and conferences, on the role of the Albanian Financial Supervisory Authority, which will bring mutual benefits, to the university staff, students and lecturers, as well as to the Authority itself in order to increase financial information”

This activity took place in the framework of the awareness raising campaign that AFSA has begun on financial education in relation to the underlying markets in order to raise awareness and information in view of better consumer protection and further development of these markets.

TIRANA, Oct 18 (Reuters) – A new, private securities exchange in Albania should be up and running by year end after getting the central bank’s go-ahead, its chief executive said on Wednesday. It will start with trading government debt and then move on to other assets, Artan Gjergji, head of the Albanian Securities Exchange, or ALSE, told Reuters in an interview.

The goal is to create a capital market in Albania, which is still struggling to modernize a quarter of a century after a particularly insular style of communism ended. It was followed almost immediately by unrest linked to a collapsed pyramid schemes.

With the long-dormant Tirana Stock Exchange now suspended, ALSE was brought into being by a group of Albanian financial market professionals backed by three Albanian-owned banks, primarily Credins Bank.

The Albanian Financial Supervisory Authority has given ALSE a full license but with the country lacking a central depository of non-government securities it will have to trade T-bills for a year.

“We shall be ready legally and technically by November and shall go live hopefully within this year, and we shall invite all the banks and brokers to trade, for now, treasury bills and bonds,” Gjergji said.
“By March, before the next summer, we shall welcome them to trade all other kinds of securities, list shares, an IPO or corporate bonds of Albanian companies, which might have the potential to get listed,” he said. Gjergji said ALSE had adopted Quick Trade, an electronic trading system currently being used by 10 bourses around the world, including five in the Balkans. ALSE will have no trading floor, but the system allows for continuous trading or auctions, he said.

TRAINING
ALSE is housed in a large hall in a Tirana apartment building. A dozen young women and men are being trained there by fellow stock exchange staff, including some from the Bulgarian Stock Exchange.

A former employee of the Tirana Stock Exchange and its financial overseer, Gjergji identified the lack of an electronic trading system as one of the reasons that doomed the Tirana Stock Exchange. It was a place where a foreign journalist once described it as being “so quiet you could hear a share drop”.
Gjergji pinned its failure on successive governments for not trading or privatizing shares of state-owned companies in the stock exchange, like “other post-communist governments from neighboring Macedonia to Moscow” did. Albania launched its old stock exchange in May 1996, shortly before the fraudulent pyramid investment scams. Some of those investors lost houses and herds of cattle when they sold their possessions to get a 300 percent return on their investment in 90 days.

People like this tend to see securities trading as fraud, making it an uphill struggle for Gjergji’s team to persuade them otherwise “Even with the regulators we faced some resistance to a revolutionary idea although the legislation exists; we had to open the eyes to the market operators and even the regulators that this (bourse) is needed and will be coming sooner or later,” he said.

Right now he believes it is the best time to launch the bourse as money is seeking alternatives for investment given the low deposit rates, the over liquidity of the banks who have tightened their lending criteria and the need of businesses for cheaper funding in a growing economy.

“All the elements were there, only the bourse was missing. It is not going to be easy, but we have now done most of the job, and businesses are starting to get interested about the bourse,” Gjergji said.

Reporting by Benet Koleka Editing by Jeremy Gaunt

The opening of the first private securities exchange in Albania is an initiative that is getting the support of the main leaders of the domestic financial system.

Minister of Finance and Economy, Arben Ahmetaj, responded to the interest of SCAN TV, that its opening is on the right track to become a real exchange in the country. According to him, this platform will soon expand the range of stock trading.

“Regarding the securities exchange, I myself have been one of the main exchange supporters. I believe that it is still an embryo and that initiative will gradually develop on a fully equipped exchange for Albania, where not only government securities can be traded, but also certified businesses can start funding through capital expansion, issuing of stock. And a third phase may include the shares of regional or even global companies through agreements that this platform can have to be traded in Albania as well”.

The Albanian Financial Supervisory Authority licensed the first private securities exchange ALSE in July.
It 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 first private securities exchange in Albania supports the country’s economic development and will have a positive impact on long-term investments by the business. The statement comes from the Director of Development and Economic Cooperation, Ministry of Economic Development, Tourism, Trade and Entrepreneurship, Pranvera Kastrati, who in an interview for ‘Scan Magazine’ comments on the licensing of the Albanian Securities Exchange ALSE. The exchange is expected to open its doors in the fall of this year, and according to Kastrati, this is accompanied by a series of challenges for business associations and state institutions, who are responsible for helping and enhancing the knowledge of the Albanian business in this field.

Mrs. Kastrati, on 3 July, the Albanian Financial Supervisory Authority has approved the opening of the first private securities exchange in Albania. From your point of view, how important is this decision for the business and the Albanian economy?
Without doubt, the creation of the securities exchange is a very important step in supporting the country’s economic development and the need to support businesses and entrepreneurship. This is also seen by the fact that in all countries, whether developed or developing, the exchange has given much added value to long-term investment resources. As long as businesses need to have opportunities and alternatives to invest in the long run, exchanges in our assessment will definitely pose a positive impact. There is no question that this process has challenges. It is a new venture, which will require, among other things, the undertaking of many activities and subsidiary initiatives, both by the government and the business itself, based on the fact that the creation of the stock itself will also enable the listing of companies, quoting their shares and will create opportunities for trading companies to trade their stock on the stock exchange.

According to you, what are these challenges?
There is a need for the exchange to have the image of trust for all commercial companies in Albania hence is very important to build confidence between the first private securities exchange and commercial companies. It is a process and an enterprise that cannot be done by the exchange alone. Indeed, it is an initiative that should have support by state institutions, businesses and business associations themselves, in order to create a climate of cooperation between the securities exchange and commercial societies. Understandably, it will not always be simple. Not all business categories in Albania will have the opportunity to make a positive use of the stock market for their investments. But, of course, like all the other processes that start in the development process, the stock market will need support, until it returns to a more consolidated support for Albanian businesses.

You mentioned the challenges and the role state institutions should have in solving them. More specifically, what should be the position of these structures in solving them?
What I consider is related to the fact that businesses themselves have to understand what the exchange is. They need to have more information in order to believe it. We can just recall that in 1996 the first exchange was created. There was a revival in 2002 (Tirana Stock Exchange), but that did not result in a successful venture and did not have the impact expected to be released at that time. I cannot say that the reason that it did not give the expected impact was the lack of education on the exchange, but it should be recognized that education has played its part. And I believe that the Albanian institutions that are responsible for overseeing and in this case the role of the Financial Supervisory Authority is very important, but together with the other institutions that monitor the financial markets in Albania, they should help train and promote knowledge to businesses on the exchange itself.

According to you, what would this bring?
It is understood that the securities exchange will initially be more acceptable and available faster to elite businesses, but if the degree of awareness and knowledge level increases, it can turn it into a good opportunity for both medium-sized businesses as well even for individuals. Given that the possibility for the individuals themselves to be able to take part in the exchange through the securities exchange, with their own savings, I believe that the more knowledge and stock exchange information is obtained, the easier it will be for the stock exchange to provide expected effects.

How does the business itself can contribute to the ‘education’ of entrepreneurs about the stock exchange?
Of course, the education on exchange market is not only a matter of state institutions. However, elite businesses need to be more and more involved in circulating knowledge about the stock market. Business associations have a role to play, whether through chambers of commerce or other financial affiliates, so that information is distributed and business expectations on stock exchanges grow.

The Albanian Financial Supervisory Authority (AFSA) organized on 19 – 20th of September a workshop in the framework of the commencement of the trainings for the third phase of the project “Strengthening Supervisory Capacities of AFSA: Focus on the Capital Market Development”. Key objective of the third phase is the professional qualification of the specialists and experts towards the supervision and regulation of the capital market.

In her speech, AFSA’s Executive Deputy Director, Ms. Mimoza Kaci put emphasis on the particular importance of this phase, which offers AFSA’s staff opportunities to deepen further their knowledge on the regulation and supervision of a market characterized by dynamic developments in Albania, such as the case of the securities and investments fund market.

Moreover, Ms. Kaci appraised the expertise provided by the two experts Ms. Sally Buxton and Mr. Mark. St. Giles, as well as the fruitful cooperation between the World Bank, Swiss State Secretariat for Economic Affairs (SECO) and the team from the Ministry of Finance’s, for the progress of this project.

The Executive Deputy Director said that this phase of professional qualification for AFSA’s staff arrives at the proper time, parallel to the structural changes of the Authority, which aim is to address in a better way the developments of the investments fund market and securities. This project started in 2016 with the support of the World Bank, and financed by the Swiss State Secretariat for Economic Affairs (SECO).

The Governing Board of the Financial Supervisory Authority licensed its first private stock exchange in Albania “Albanian Securities Exchange – ALSE” on Monday.

This is one of the most important developments in the history of the non-bank financial market in Albania. ALSE is the first stock exchange that comes as a private entrepreneur initiative and with a clear project to be functional and successful.

“SCAN” will provide more details about the first private stock exchange, as the decision will be officially published by the Financial Supervisory Authority in the coming days.

In recent years we have been registering many indications that there is a potential supply and demand for stock market instruments in the financial market.Credit tightening during the crisis period has increased the need for the provision of financing with alternative instruments. Already, there are some private companies that are applying debt-repayment bonds, such as bonds or trade receipts.On the other hand, the market requires alternatives with higher returns on investment, given that the stimulating monetary policy that is prevailing across the European economy has reduced the interest rates of deposits and government securities to historical minimums.In the absence of a stock exchange, many individuals have invested in online stock exchanges, working with intermediaries that have not always been reliable.

The opening of the first private stock exchange will finally fill the gap of a capital market in the Albanian economy.

Tirana Stock Exchange (TSE) has been closed down, without having any company listed and without trading any securities throughout its life of 12 years, failing in its facility to create a capital market in Albania.

According to sources from the Ministry of Finance, after being left three months to find the revenue itself for the smooth running of the activity, the closing paper has recently been signed. Tirana Stock Exchange was established in 2002 in the form of a joint stock company and has functioned in accordance with the provisions of Law No.9901 date. 14.04.2008 “On Traders and Companies” and Law No.9879 dated 21.02.2008 “On Securities”.

The object of the Tirana Stock Exchange was to create a capital or securities market by creating a trading system by which “offers for sale, purchase or exchange of securities are performed or received on a regular basis; the offer or requirements are regularly filed when there are predetermined or expected offers or requests that result directly or indirectly in the making or receipt of bids for the sale, purchase or exchange of securities; or information is regularly provided regarding the prices and rewards that special people or groups propose or expect to sell, buy or exchange securities “.

Why did not the stock exchange work?

While in other countries of the region, the capital market development was supported by the state, with many countries that realized the sale of state-owned enterprises through securities, in Albania the chosen form of privatization was through auctions, tenders, or privatization bonds. On the other hand, the domestic business was reluctant to move to a higher stage, that of securing funding through public bidding on the stock market, as high informality (two-balance sheet work, which brought the non-declaration of income) was another barrier for companies to turn to the stock market.

The only hope for Albanian companies to provide funding through the capital market is the plan for a regional stock exchange. Tirana Stock Exchange has been active only for a short time after 2002, being the government agency on the securities secondary market, but this function was also passed to the Bank of Albania.

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