BAKU, Azerbaijan, August 26. Baku Stock
Exchange (BSE) continues work to automate trading operations in the
secondary bond market, with the launch of the new functionality
planned by the end of the year.


BSE Board Chairman Ruslan Khalilov told Trend’s correspondent, in
response to a question, that the new functionality will allow
investors to buy and sell bonds on the secondary market
automatically through their brokers.


“Until now, in both the primary and secondary bond markets, each
investor has had to approach a brokerage company and place an
order. The brokerage company then buys or sells the required amount
of bonds based on that order. What we are talking about is simply
automating the same operation. The new functionality in the
exchange trading system will allow each investor to automatically
buy and sell bonds traded on the secondary market through a
broker,” Khalilov said.


According to him, the rules for calculating the “clean price”
and “dirty price” of bonds under the new system have also been
agreed with market participants.


“We discussed these issues with members of the Azerbaijan
Capital Market Association and brokerage companies. The
negotiations have now been completed. Based on the common rules
agreed upon by market participants, we have commissioned a vendor
company to develop the functionality. Its development, full testing
and delivery will take about three months. We plan to have it
delivered by the end of the year,” the BSE chairman said.


Khalilov also said that trading volumes of shares on the
secondary market are at a satisfactory level.







“Trading is taking place on the secondary market. In the ‘Market
Watch’ section, you can see the secondary-market volumes for both
PASHA Bank and International Bank of Azerbaijan. Currently, the
turnover ratio of the secondary market relative to free-float
shares is by no means low. It is quite good. Market-making
organizations are also supporting this,” he said.


The BSE chairman also noted growing interest from foreign
companies in Azerbaijan’s capital market.


“Recently, investor demand relative to placement volumes has
increased significantly compared with previous years. For example,
if you compare bond issuances by other banks with Ziraat Bank’s
issuances in previous years, in earlier periods only 10-15
investors, mostly institutional ones, showed interest in such
volumes. The measures being implemented in automation,
digitalization and financial literacy are beginning to produce
results. There is considerable interest,” Khalilov said.


According to him, this interest is also beginning to be
reflected on the issuer side.


“Foreign companies are showing interest in the Azerbaijani
market and are contacting us. For now, this is at the information
exchange and preparation stage. However, there are no companies
that have submitted a specific application yet,” the BSE chairman
said.