Securities Market Narrows

The securities market in Azerbaijan, despite the almost twofold increase in margin trading, continues to narrow. For 11 months the market, taking into account the derivatives, amounted to 9.6 bln manats, which is 15% less than in the comparable period of 2014, according to the State Committee for Securities.

Since the beginning of the year the securities segment was recorded 4,329 transactions (-26.9%), totaling 3 billion 466.2 million manats. At the same time turnover of 3,688 shares equaled 626.8 million manats, decreasing in overall terms by 74%. The volume of distribution and sale and purchase of corporate bonds fell by 3%.

Azerbaijan has not practiced mass placement of shares by private companies. Primary placement of new share issues of operating companies is mainly arranged among current holders of the securities.

The market volume of government securities in the 11 months amounted to 140.3 million manats. This is just 3% of this market segment, recorded in the same period last year.

Analysis of transactions on derivative securities (margin trading in currency pairs and non-ferrous metals) shows that after the devaluation of the manat in February, investors' activity has fallen sharply. However, year on year market volume (more than 6 billion manats) increased by 88%. Note that in this market segment transactions account for both purchase and sale of security derivatives by one investor. Therefore, actual cash flow of margin trading is about 3 billion manats. ----08D