Azernews.Az

Friday March 29 2024

Azerbaijan, WB hail implementation of Capital Markets Modernization Project

4 November 2016 17:58 (UTC+04:00)
Azerbaijan, WB hail implementation of Capital Markets Modernization Project

By Nigar Abbasova

The development of the capital market, which is considered to be a multi-faceted sector of the economy, is currently in focus of relevant financial authorities of Azerbaijan.

The results of the Capital Markets Modernization Project (CMMP) supported by the World Bank and Switzerland’s State Secretariat for Economic Affairs (SECO), was at core of discussions at the conference hosted by Azerbaijan’s Financial Market Supervisory Body (FMSB) and the World Bank (WB).

The CMMP for Azerbaijan was aimed at the increase of the use of equity and corporate debt as financing or investment instruments through the adoption of an effective regulatory framework of the capital market.

Head of FMSB Rufat Aslanli addressing the event said that the project has significantly enhanced the potential of Azerbaijan’s capital market, providing organizational and operational support to modernization of the market.

However, the authority believes that the country needs implementation of additional measures in this direction. Aslanli mentioned that the main objective is to attract those, who will be interested in the use of the potential of the market.

SECO Deputy Regional Director for South Caucasus Simone Haeberli, speaking at the event said that the secretariat is ready to implement new projects of technical assistance to help Azerbaijan solve the most difficult issues existing in the sphere.

Haeberli said that Azerbaijan and Switzerland have been cooperating effectively for already 25 years, including the cooperation within the SECO, which covers the microeconomic policy and ensuring financial stability. She underlined that modern and transparent capital markets are now more important for Azerbaijan than at the time when the SECO started implementation of the project.

Capital market, which stands for the market for buying and selling of equity and debt instruments, is vital to the functioning of an economy, since capital is a critical component for generating economic output.

World Bank’s Practice Manager for Finance and Markets Rolf Berhnd, in turn, said that one of the main functions of the WB is improvement of conditions for small and medium-scale entrepreneurs, mentioning that capital markets are considered to be one of the main tools for reaching the goal. He mentioned that capital market is one of the key vehicles for domestic and international investment mobilization, which requires concerted efforts, holistic reforms and time to do it right. Berhnd said that the implementation of the reform of the capital market is quite a difficult process, underlining that Azerbaijan has managed to succeed in the sphere despite the difficulties. He mentioned that the reform will allow to create favorable conditions for the attraction of foreign investments.

WB’s senior financial sector specialist Angela Prigozhina said that the project supported a package of reforms needed to diversify the financial sector and ease the access to alternative financing tools for Azerbaijani companies operating in the non-oil sectors.

CMMP was approved on March 17, 2011 with a $12 million loan from the World Bank, supplemented by SECO Trust Fund grant of $1.6 million. The share of Azerbaijani government in the project, which was closed on Luly 1, 2016 amounted to $2.2 million.

Among the most notable results of the project are enactment of the modern Law on Securities and implementation of new regulatory requirements, which are in line with the best international practices. Moreover, the project contributed to the establishment of the Centralized Trading System (CETA) which linked investors, market-players, Baku Stock Exchange and National Depositary Center in a single trading and post-trading system, significantly reducing transaction time and costs.

--

Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz

Loading...
Latest See more