Prospective ways of development

THE MINISTRY OF EDUCATION AND SCIENCE OF
THE KYRGYZ REPUBLIC

ALA-TOO INTERNATIONAL UNIVERSITY

ECONOMICS AND ADMINISTRATIVE SCIENCES FACULTY

ECONOMICS DEPARTMENT

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Stock Exchange of the Kyrgyz Republic:

Prospective ways of development

Research paper

By Ainazik Baktybekova

Instructor: Esenalieva N.

Bishkek 2023

Abstract

Rapid industrialization is now seen as one of the main economic growth drivers in many developing countries.  As a result, it has become critical for capital-poor countries to develop an institutional structure that will improve savings mobilization.In the modern world, the role of securities in the economy has greatly increased. The stock market directly depends on the actions of the Stock Exchange. With the help of such instruments as the stock market, there is a good opportunity to attract easy long-term money to your office. The stock market is important for building long-term strategic plans for the development of the economy.The project focused on the effect of the Kyrgyz stock exchange on Kyrgyzstan's economic growth. The data collection method was direct interviews from top officials. secondary data and research done, which were provided in open sources. In the course of our work, our team found out the problems hindering the development of the National Securities Market and the weak development of the financial sector. The problem was whether the untapped potential of the Kyrgyz Exchange Traded Fund would affect the country's economy. And why don't investors trust domestic firms.  As a solution to this problem, the ways of development of the Stock Market of other countries will be given.

Key words: Stock, exchange, market, kyrgyz, securities .

Table of Contents

1. Introduction…………………………………………………………………….
2. Literature review…………………………………………………………..……
3. The emergence and development of the market………………………...…...

1. Methodology……………………………………………………………………..

Results………………………………………………………………………………....…

1. Conclusion…………………………………………………………………..……
2. References……………………………………………………………………...…

1. Introduction

         For several centuries, stock exchanges have been the center of the market economy. For many years of successful work in the USA, Great Britain, Japan and other countries, a lot of experience has been accumulated, which today is very useful for our country. In the past, the stock market, the stock exchange, was often the site of speculation and deception. The stock market is currently regulated by very strict trading rules that are supported by both professional market participants and government regulators. They allow you to minimize the possibility of fraud and deception of investors. But in Kyrgyzstan, the structure of stock exchanges is different, and the market is not so well developed. The development of the economy is directly related to the securities market, which allows enterprises to accumulate surplus funds to expand production. The formation of the Kyrgyz market has led to the emergence of stock exchanges in the country, the institution of professional market participants and the creation of a legal framework. However, the problems of attracting investors to the market remain unresolved due to the need to obtain more complete information about market activity from potential investors. The transition of the Kyrgyz Republic to a market economy required the creation of new markets that are not inherent in a planned economy. This led to a change in traditional trade and the formation of new forms of trade. This process, which began in our country in 1994-1995, continues in a new capacity to this day.

        In the paper we will talk primarily about the history, development and creation of stock markets in general. We will also show the nature and functions of the securities market, its role in the economy. The stock exchange is a very large market that includes many types. And there is a question. Does kyrgyz stock exchange have potential in this market? The purpose of this research is to define the potentiality of Kyrgyz stock exchange. In Kyrgyzstan, people do not trust either the government or corporations. This is a very sad picture of the government's financial system. Why are Europeans and Westerners not afraid to invest their money, while our citizens are saving it at home? To answer such questions, we had to do some analysis and took interviews via social media and calls. Moreover we have looked for a lot datas from the internet.  The Kyrgyz Stock Exchange is a relatively young stock market, and it is developing very slowly. This has a number of problems and other circumstances that negatively affect the development of the market.And also we told about the history of the stock exchange and how it started to work.

1.1. The history of the Stock Exchange

. The first steps toward creating controlled trading sites such as exchanges, according to historians, were taken in the thirteenth century. Even back then, there seemed to be an agreement among businessmen that it was important to arrange a place where potential participants in trade transactions could meet, discuss, and negotiate prices for products without the latter's physical presence.  

This is how the first commodity exchanges appeared, a little later - stock exchanges and, finally, their currency counterparts. Since Soviet Union has collapsed in Central  Asian countries started to appear new concept , specifically concept of Stock Exchange . In 1994, the Kyrgyz Stock Exchange (KSE) was founded as a non-profit, non-governmental body. Brokerage firms, commercial banks, and joint-stock corporations formed it. The Kyrgyz government's State Securities Supervision Agency and Price Waterhouse, which merged with Coopers & Lybrand in 1998, were the first to trade on the Kyrgyz stock exchange in May 1995. The nation was in the midst of a privatization process at the time. They started calculating the KASE index based on the value of shares exchanged on the exchange in July of that year. The exchange was created with the aid of 98, which later became PriceWaterhouseCoopers (PwC).