Baku Stock Exchange may start using blockchain technology

The Baku Stock Exchange (BSE) is studying the possibility of using blockchain technology in its work, Chairman of the BSE Management Board Vuqar Namazov told Trend.

The technology is actively studied at foreign stock exchanges, and in some cases the blockchain technology is already being applied, he noted, adding that at this stage, the BSE conducts its research independently, without attracting foreign partners.

Namazov noted that the BSE has no plans for the near future to open trade in cryptocurrency, which is also based on the blockchain technology.

“First of all, the Azerbaijani government should make a strategic decision as to whether we will use cryptocurrency in Azerbaijan or not,” he added. “If a positive decision is taken, it will be necessary to form a legal basis and only then it will be possible to talk about organizing trade in cryptocurrency. In the absence of legislation, the cryptocurrency trade at the BSE would be considered a speculation, and the BSE doesn’t deal with such things.”

Earlier, Chairman of the country’s Central Bank (CBA) Elman Rustamov said that the position of Azerbaijan’s Central Bank (CBA) with regard to cryptocurrency remains conservative.

He said that the CBA does not consider cryptocurrency as an alternative means of payment.

“We think that cryptocurrencies continue to be a dangerous instrument for investing,” added Rustamov.

Azerbaijan establishes special headquarters for budget forecasts’ execution

Azerbaijan’s Taxes Ministry has established a special headquarters for the timely and accurate execution of budget forecasts, the country’s Taxes Minister Fazil Mammadov said.

He made the remarks at a regular meeting of the ministry’s board, Azerbaijan’s Taxes Ministry said in a message.

The headquarters has been instructed to accurately and timely determine tax potential, which will be used to select tax supervision measures in order to ensure tax revenues.

Other duties of the headquarters include ensuring coordination between structural units and subdivisions of the ministry, defining daily responsibilities of the functional structures of the ministry.

If necessary, the headquarters will also present proposals on the issues of administrative, personnel, structural and disciplinary responsibilities of the ministry’s employees.

Azerbaijan needs new tools on stock market

Use of classical stock market tools has not reached the desired level to form new ones on their basis, said Vugar Namazov, chairman of the Baku Stock Exchange (BSEX).

Bonds and shares are considered as classical stock market tools, while relatively new tools include futures, options, forward contracts.

Namazov told Trend Azerbaijan yet needs a well-shaped entrepreneur thinking that will enable to admit bonds as an alternative tool to attract financial resources.

"Our key task today is to develop classic tools. Later on it is possible to speak about new production tools, or financial engineering tools. It is necessary to upgrade stock market, the institualization of which will allow for trading with futures. Another example is a shares market, that would enable us to trade with share of investment funds in future," Namazov underlined.

The total turnover of exchange deals with all tools at BSEX exceeded 9.57 billion in January to October 2017, thus exceeding the last year figure by 2.2 times.

The amount of state securities made up 3.8 billion manat, or up by 8.4 time on year on year, the turnover of corporate securities market reached 1.37 billion manat, or up by 4 times, the volume of derivative instruments made up 4.4 billion manat, or up by 22.2 percent.

Azerbaijani banks offer to exempt insolvent borrowers from taxes

Azerbaijani banks have offered to exempt insolvent borrowers from taxes, a source in the country’s banking sector told Trend.

Representatives of Azerbaijan’s Financial Market Supervisory Authority, the country’s Banks Association and heads of local banks discussed this issue at a meeting.

The source noted that insolvent borrowers may be temporarily or fully exempt from taxes. At the same time, the source didn’t specify from which taxes the borrowers may be exempt.

Other proposals made at the meeting included creation of a mechanism for managing troubled assets and the development of the so-called Baku Approach. This approach may be created by analogy with the London Approach or the Istanbul Approach.

It was proposed to restructure troubled loans and reconsider the terms of lending, so that borrowers could repay their debts more easily. At the same time, the Baku Approach envisages banks’ joint restructure of loans of a borrower if he or she has several overdue loans in different banks.

In January-October 2017, the volume of overdue loans in Azerbaijan amounted to 1.889 billion manats, which is 37.4 percent more than in the same period last year, according to the Central Bank of Azerbaijan. The share of overdue loans in the total loan portfolio of banks and non-bank credit organizations was 15.55 percent.