Stock Exchange in Kyrgyzstan Essay

2369 WordsApr 20, 200910 Pages
I. Introduction Transition of Kyrgyz Republic to market economy demanded not only changes of existing market, but also formation of new ones that were never existed before. With the privatization of publicly owned enterprises, there arose a need for a non-commercial organization whose sole mission would be to provide a fair and transparent mechanism for trading stocks and bonds. Therefore establishment of the stock exchange market was the natural result of the Kyrgyz Republic’s transformation into market economy country. The basic function of a stock exchange is allowing public companies and the state attracting investments by selling securities. The stock exchange also functions as a secondary market, allowing for some investors selling their securities, and other investors buying them. The purpose of this paper is to analyze the stock exchange companies in Kyrgyzstan, in order to determine the difficulties that it met on the way to its development. For instance, the turnover of stocks on USA market in 2005 is 199,5 % of country’s GDP, whereas in Kyrgyzstan it is 1,7 %. By increasing this share and generally by expansion of financial sector of economy it will be promoting the overall development of country. This will be possible through successful operation of stock exchanges. The work is organized as followed. First part will include the definition of stock exchange. Also here will be given main functions that it provides. Afterwards there will be described existing stock exchanges in Kyrgyzstan. Also this section will reveal difficulties that occur. In the end there will be given concluding remarks. 2.1. Stock Exchange. Stock exchange is a marketplace where securities are sold and bought. The basic function of a stock exchange is allowing public companies and the state attracting investments by selling securities. In other words it is a financial

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