FEDERATION OF EURO-ASIAN STOCK EXCHANGES
SEMI ANNUAL REPORT OCTOBER 2006
MOLDOVAN STOCK EXCHANGE
Dr. Corneliu DODU
President
The securities market is an integral part of
the overall financial market and its activity
reflects the state of affairs of the Republic.
With the country's goal to become integrated
into the EU as well as a globally recognized
developed stock market, foreign policy has
become the priority.
As mentioned before the main priority for the
Moldovan Stock Exchange (MSE) is foreign
policy as Moldova is striving for integration
into the EU. Therefore development has
been aimed at creating a civilized and
developed securities market with the
perspective of integrating into the world
market capital through gradual transition.
HISTORY AND DEVELOPMENT
In December 1994, the MSE, a closed
company, was established under the law on
Securities Circulation and Stock Exchanges.
Originally, 34 securities market professionals
participated in trading. The first transactions
were held on 26 June 1995, which is
considered the date of the founding of the
MSE.
Due to the assistance of the USAID, the
Exchange is equipped with advanced
technology for stock auctions. In 1998 the
MSE established the National Securities
Depository (NSD), a non-commercial joint-
stock company.
At the initial stage of the MSE's development,
the authorized capital adequacy standards
were set as an authorized capital of
US$ 18,030 (MDL 238,000). In 1998 capital
adequacy increased from US$ 29,697
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With the country's goal to become
integrated into the European Union as well
as a globally recognized developed stock
market, foreign policy has become the
priority.
A major objective for 2005 is to continue the
reorganization of investment funds and to
hike market liquidity. One way to achieve this
goal is through the establishment of holdings
and to introduce marker makers, a new
status for MSE members.
The volume of transactions registered in
2005 semi-annual period was US$ 11.62
million, compared to US$ 11.84 million in
2004. During the same period, 194 equities
transactions took place, the total number of
transactions was 870, a little less
comparatively with the analogical period of
the previous year, which was 972
transactions and 261 issuer's equities
respectively. The number of registered
companies as of June 30, 2005 was 1061,
including 26 listed companies.
(MDL 392,000) and is now US$ 37,879
(MDL 500,000). The equity capital sufficiency
norms of US$ 75,758 (MDL 1.0 million), and
guaranty fund adequacy norms of 30% of the
authorized capital as set by the legislation are
currently in practice.
In April 2000, the MSE received the status of a
self-regulating non-commercial organization.
At the beginning of 2002, the National
Commission introduced the CNVM-32 index.
The world famous index, Dow Jones, serves
as a basis for the calculation of the CNVM-32.
In June 2005, the MSE celebrated its tenth
anniversary. During the period of its
development, the MSE underwent a difficult
evolution. But the changes that have taken
place have had a positive effect on the
activities of all participants of the stock
market, including the Exchange itself.
Also in six months a series of modifications
and innovations were implemented.
The most important of the modifications was
in the Law on Securities Market and in the
Law on Joint Stock Companies, the
Conception of Transaction's Optimization at
Secondary Market (adopted by the National
Securities Commission). The main reason
these modifications were implemented is
development of transparent and liquid
securities market, which will encourage
domestic and foreign investors to accelerate
their activity at Moldovan market. This newly
established environment is expected to have
a positive impact on the securities market.
FUTURE OUTLOOK
Below are the MSE’s plans for 2006:
• implementation of two organized market
segments: I- listing (Platforms A and B);
II- non-listing;
• introduce a “remote broker” system, which
is currently underway;
• introduce a module for electronic settlement
with banks; and
• improve technology system through high-
speed networks that will increase capacity.