FOLLOWBUSINESSALBANIA STOCK EXCHANGE
Anila Fureraj, PhD Capital Market Expert, Former CEO, Tirana Stock Exchange Investment Advisor (licensed by AFSA) Broker in Securities (licensed by AFSA) Board of Management, Aksioner International Brokerage sha Lecturer, European University of Tirana
Anila Fureraj: Stock Exchange, a Pioneer in Impacting Other Aspects of Economy Positively
Capital Market Expert and Former CEO, Tirana Stock Exchange, Anila Fureraj, told FOLLOW BUSINESS ALBANIA that “the Albanian capital market is still in early stages of development, thus putting in place concrete projects is necessary to boost its further development. One of the major reasons for doing so is the expectation that the capital market might efficiently provide more funds to the economy and help Albanian economy prosper.” She underlined that to ensure the growth of the Albanian capital markets, it is necessary to have an external support. “In this regard, I would like to remind that Tirana Stock Exchange signed the Platform for Joint Action with the other Stock Exchange in the SEE countries on March 2012, and on May 2013 signed the Memorandum of Understanding with Borsa Istanbul, to receive know-how and expertise and starting learning from experience through knowledge sharing.”
Please can you tell us more about the efforts to establish the Stock Exchange Albania? How it will impact on the Albanian market? Capital markets facilitate the investment environment through fair, transparent and efficient price discovery. Albania faces considerable challenges in its economic development, one of them being the development of a capital market. Achievements in the financial sector are equally important for the development of the Albanian economy which has a potential to be utilized to create a sound capital market in Albania. The favorable investment environment is vital for attracting large-scale international investors and boosting productivity. Investors in developed markets are increasingly becoming convinced of the merits of investing in emerging markets. 32
As a part of general trends towards liberalization, deregulation, privatization, the diminution of the role of State and enhancement of that of the market, an important feature of the development of the financial sector in many developing economies is the very fast growth of their stock-market. Companies listed in stock exchange are more visible for large investors, and in the other hand, without efficiently capital markets, investors have limited means to diversify their portfolios. Companies, with the additional capital raised through capital market, would be able to enhance their operations, carry out further investments, do more research and hire more people. The development of Albanian securities markets can help banks to better manage their risk exposures, by facilitating hedging activities through the use of derivatives
and by reducing their vulnerability to liquidity risks through bond issuance. The Albanian capital market is still in early stages of development, thus putting in place concrete projects is necessary to boost its further development. One of the major reasons for doing so is the expectation that the capital market might efficiently provide more funds to the economy and help Albanian economy prosper.
The Stock Exchange embodies an important three-part strategy: promote corporate governance; improve fundraising channels for SMEs; and encourage long-term savings. Could you tell us more about each of these three directions? Corporate Governance is a topic of great interest in today’s financial world and another channel through which financial development may influence economic growth is by improving corporate governance. The main direct contribution of stock exchanges to corporate governance has been listing and disclosure standards and monitoring compliance. The value of the securities, the price investors will pay for a corporation’s securities, depends directly on the quality of the corporate governance system. Bond and equity investment requires good corporate governance, and good corporate governance requires the capacity to make credible disclosure of financial results. Effective corporate governance also requires ownership transparency. Stock markets could improve corporate governance by alleviating the principal-agent problem between the owners and managers. The effective corporate governance is a prerequisite to capital market. Corporate governance at its core involves the monitoring of the corporation’s performance and the monitor’s capacity to respond to poor performance; the ability to observe and the ability to act. Transparency goes directly to the capital market’s ability to observe a corporation’s performance. Most information concerning a corporation’s performance is uniquely available from the corporation, and without effective disclosure of financial performance, investors cannot evaluate management’s performance, cannot forecast the corporation’s future cash flow. SMEs are the engine of an economy, the main source of employment in developed May 2018