FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2014
FEDERATION OF EURO-ASIAN STOCK EXCHANGES
İbrahim M. TURHAN, Ph.D.
Chairperson of FEAS
The year 2013 has been a highly volatile period
during which recovery in advanced economies
improve while emerging market economies
seem to slow down. After growing by 2.8% in
2012, US economy expanded by 1.9% in 2013
thanks to momentum in real estate sector.
Despite the negative economic growth rate
of -0.5% in 2013, the Euro-zone got out of
the recession after its positive performance
in last three quarters of the same year. The
most remarkable development of 2013 was
the FED’s announcement to withdraw excess
liquidity from the market through reductions
in its bond-buying program. After the move
in May 2013, several emerging economies
experienced capital outflows and significant
hikes in borrowing costs. The ‘tapering’ will
not just affect those markets adversely in fiscal
terms but also may have long lasting effects
on growth rates due to the absence of liquidity
that supported long-term projects and similar
initiatives in emerging markets while providing
investors with hefty returns. In light of those
developments, IMF predicts that advanced
economies will expand by 2.2% in 2014
whereas emerging market economies will grow
by 5.4% during the same period.
The capital markets moved in line with the
recovery in advanced economies. According
to WFE data, the global market capitalization
in 2013 increased by 17%, reaching to USD
64 Trillion, a level that we observed just before
the Lehman bankruptcy. However, the volume
of worldwide equity transactions, not matching
the rise in market capitalization, grew by 12%
to USD 55 Trillion. The turnover value in ETFs
and number of derivative contracts traded
Increased cooperation and transfer of
know-how among members not just
contribute to development of each member
market but also make the FEAS region an
attractive landscape for investment.
on exchanges have gone up by 11% and 1%
respectively. Driven mainly by the slowing
economic activity in Europe, Africa and Middle
East (EAME) region the volume of bond trading
declined by 15% in 2013. On IPO front, the
number of companies which went public and
the amount of funding raised through those
IPOs showed an increase in 2013 following two
consecutive declines in previous two years.
The fact that the investment flows through
IPOs grew by 34% to USD 167 Billion despite
a mere 2% rise in the number of newly listed
companies demonstrate that firms which are
bigger in size preferred equity markets to
access capital.
In its eighteenth year of operation, FEAS
accomplished noteworthy events such as the
new statistics system together with the new
web site where all member data is conducted
in line with WFE and FESE standards and
calculations. Also, the First Executive Board
Meeting was held in Sarajevo, Bosnia and
Herzegovina in May, together with the Working
Committee; FEAS General Assembly Meeting
and Executive Committee Meeting were held
in Muscat, Oman on December 2013. Road
shows were planned to take place in 2014 and
several reports on SMEs, Investor Relations
and Market interest have been conducted by
the Task Forces. FEAS Rule Book has been
finalized and Rules and Regulations Task
Force published 2 reports to provide feed-back
and commentary on the recommendations of
IOSCO.
I also would like to take this opportunity
to extend my heartfelt thanks for their
contributions to Is Investment and Finans
Asset Management, for making this publication
possible.
Recent economic developments show that the
direction of capital flows is changing and global
liquidity may not be abundant for emerging
markets as it was the case in last couple of
years. The investors will be more selective and
we will witness a fierce competition for available
funds. In such conditions, the significance of
associations such as FEAS becomes more
apparent. Increased cooperation and transfer of
know-how among members not just contribute
to development of each member market but
also make the region that FEAS members
operate an attractive landscape for investment.
In this context, we will continue to work together
for a better market infrastructure, a solid
regulatory environment, stronger corporate
governance. Without question, the future
outlook of our economies in the region is bright
and what we have to do is further develop
this collaborative business model that will turn
economic potential into concrete achievements
for our financial markets.
Sincerely Yours
PAGE 3