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Government securities account for 98% of stock exchange market in Azerbaijan

03 December 2008 09:45 (UTC +04:00)

Repurchase transactions made up 72.3% of the government securities market, leaving 17.7% to short-term notes issued by the National bank of Azerbaijan and 53% to notes secondary market, 3.3% to T-bills placing and 1.4% to T-bills secondary market.
The share of corporate securities was 2.3% or AZN 191.9 million. Of this, stocks primary market was 73.9%, stocks secondary market 1.4%, corporate bonds primary market 16.9% and secondary market 7.8%.
The stocks secondary market is not very active in Azerbaijan.
While this segment accounts for 1.5% of corporate securities sector, its share in otal exchange turnover is 0.03%.
However, this doesnâ€™t indicate the absence of stock deals in Azerbaijan because about 95% of stocks are traded on he unorganized market.
For this reason, both the liquidity and transparency for stocks are very low in Azerbaijan.
As a result, the development of capital market, evaluation of capitalization of joint stock companies, secondary market of portfolio investments, attraction of foreign investors and other important trends in the stock market lags far behind.
The situation might be improved by abolishing or minimizing unorganized market but there are no specific measures at the governmental level.