Gent Sejko: Address - launching ceremony of the first corporate
security listing on the stock exchange
Address by Mr Gent Sejko, Governor of the Bank of Albania, at the launching ceremony
of the first corporate security listing on the stock exchange, Tirana, 7 July 2023.
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Honourable Minister Ibrahimaj,
Dear Ms Vokshi, Ms Spahiu
Dear Mr Mete,
Dear shareholders of the Albanian Securities Exchange,
Colleagues and guests,
I would like to extend my sincere appreciation to the Albanian Securities Exchange
(ALSE) for the invitation in this event, which aims to address the listing for the first time
of a debt security with public offering of a private-owned capital company.
First and foremost, I would like to express my enthusiasm as this first-ever public listing
in the securities markets is step number one in the completion of a process which
extended for several decades and required efforts from regulatory institutions, such as:
the Ministry of Finance and Economy, the Albania Financial Supervisory Authority and
the Bank of Albania. Against this backdrop, the listing would not have been possible
without the consistent perseverance and the monetary and professional backing of
those who wanted to build the Albanian securities market, its shareholders: Credins
Bank, American Investments Bank and AK-Invest. They recognised the unexplored
potential of the Albanian market and its opportunities for developing and supporting our
economy.
Allow me to emphasize that the central bank considers the development of a functional
capital market in Albania as crucial.
A well-developed capital market is beneficial in several aspects, some of which I will list
below:
First, it improves the long-term financing of companies and efficiently directs
public savings toward investments in the economy;
Second, it lowers the country's exposure toward the unexpected interruption of
foreign capital;
Third, it reinforces the financial market and enhances the efficiency of capital
distribution in the economy;
Fourth, investments from non-residents ensure liquidity as well as a geographical
distribution of risk;
Fifth, it further improves the financial stability of the country by distributing risk
beyond financial institutions, and by diversifying the range of financial products
available;
Last but not least, if business is oriented toward the capital market, the degree of
formalisation in the economy, the financial transparency of businesses and their
image are improved as they respond to the demands of the market. On the other
hand, the listing increases the degree of market supervision and improves the
well-governance practices of companies listed on the stock exchange.
And for all of the above the Bank of Albania, over the years, has undertaken a series of
measures in the form of legal acts that regulate the well-functioning of the capital
market, approximating them to the European directives. Also, the necessary
infrastructure for trading and electronically recording exchange of securities has been
established, thus improving the payment system and creating deposit institutions,
including private ones. Currently, we have also worked to push forward the secondary
government securities market, in order to increase its liquidity and its capability to
cushion the impact from the shock of the liquidity risk premia.
Dear Ladies and Gentlemen,
The Stock Exchange is an important capital market institution, which coordinates the
demand and supply of securities issued openly, freely and continuously. The trade of
securities on the stock exchange always represents an exceptionally sensitive indicator
of the financial soundness of a certain company as well as the economy, overall.
Another important aspect is transparency to the general public, in regards to both the
price of the quoted stock or debt and the financial information of listed companies,
derived in real time.
Therefore, signing and launching the first public offering, as the one conducted by the
non-bank financial institutions, NOA, marks a success not solely to the issuer, who will
fund its expansion through this medium-term financing, but also to the institutional and
individual investors, who will use this investment to diversify their portfolios.
The agreement was reached fully and before the assigned deadline, which show that
investors trust the entire preparatory process and the transparency of the issuer
regarding the financial soundness and integrity of its financial statements. The listing of
this product on the stock market will provide an opportunity to investors to exchange
ownership early on, depending on personal expectations on issuer's performance and
as well as liquidity preferences. Whereas for the central depositor, ALREG, the listing is
expected to facilitate keeping the registry and exchanging securities between various
investors. Thus, the first public issuance of a private debt instrument opens the door for
domestic banks to provide the service of signing securities in the domestic market.
In this aspect, I would like to express, once more, my support for all the regulatory
actors and, particularly, the AFSA for its long-lasting and valuable contribution in
drafting and reviewing a series of legal and regulatory acts over the past years, where
the Bank of Albania has also played its part in providing opinions and
recommendations, thus showing the close cooperation between our institutions.
Dear Ladies and Gentlemen,
In conclusion, I would like to emphasise that this is not the time to rest in our laurels, but
we need to reflect on future challenges in order to render the local capital market as
vital and as functional as possible. The approval of the latest Policy Paper "On creating
an environment which facilitates the development of capital markets in Albania,
20232027" is a qualitative step toward the identification of problems and obstacles and of
relevant suggestions to improve the main components for the development of capital
markets. They aim to further complete the legal and regulatory framework, the market
infrastructure, financial education and the development of various capital market
segments.
In this framework, the Bank of Albania in cooperation with the AFSA and the Ministry of
Finances and Economy is undertaking the necessary steps to start an important project
with the EBRD, which will identify the need to amend the legal acts that regulate
financial market activity, aiming to render the trading environment safer, for both
international and national investors.
Given the characteristics of the Albanian financial market, the Bank of Albania deems
that the development of capital market must be stable and gradual. It should give
priority to opportunities that attract more non-resident investors, strengthen investing
capacities of non-bank financial institutions and increase liquidity in their secondary
markets. Furthermore, the expansion of both stock and derivative products will be
driven by strengthening the harmonising capacities of supervision and reporting to
lawabiding institutions.
On the other hand, the policy-making should also allow fiscal facilitations, primarily in
regards to investors, which would translate in low financing costs for the issuer.
Also, creating a special room in the Administrative Court to resolve financial market
disputes will help improve the investing climate. In the same vein, the establishment of
the Financial Ombudsman will ensure legal support to investors that are engaged in or
benefit from financial services.
Last but not least, the banking system should support the capital market development
through the diversification of investments toward corporate products. This market
should be considered complementary rather than as a competition to the economy,
where banks would profit in regards to both investment portfolio diversification, as well
as better risk management.
I wish the best of luck to the financial stakeholders present here!
Thank you for your attention.