Companies often need additional funding to launch a new product, expand the geography of supplies or modernize production. One way to raise funds is to issue securities and search for investors through the stock exchange. Stock exchanges were created to trade securities, expand opportunities for attracting investment and boost exports.
Small and medium enterprises (SMEs) can take out a loan from a bank. But in some cases it is more profitable to issue shares or bonds.
A company issuing shares offers investors a stake in its company. They will be able to count on dividends, which are usually part of the profits. The company does not guarantee income to investors, but they become co-owners of your business and have the right to influence its development.
Bonds are debt securities. By issuing bonds, the company borrows money from investors, and in return undertakes to pay them interest (coupon income). The advantage of this method is that, unlike a loan, the company itself determines how much and how often it is ready to pay bond buyers.
How is the issuance of securities carried out in accordance with the rules of the Ashgabat Stock Exchange?
Shares can be issued in the amount of at least 350,000 manats and in the amount of at least 5,000 shares.
Bond requirements are below. The total amount of bonds should be at least 35,000 manats and at least 100 bonds.
The company must meet the following criteria:
- The company must be registered in accordance with the procedure established by law and carry out its activities for at least one year. At the same time, the company is not in a state of bankruptcy, liquidation or reorganization;
- The equity capital of the company must be at least 1,050,000 manats. It is desirable that turnover and profits grow. And if the company received loans, then there should be no delinquency on these loans;
- At the time of listing, the company must be transformed into an open joint stock company.
The securities market, as an integral part of the financial and credit system, is subject to state regulation, the purpose of which is to protect the interests of investors from illegal actions.
This year, for the first time in the history of the stock market of Turkmenistan, the authorized body registered the issued corporate bonds of Mary Deri-Aýakgap OJSC and Lebapetönümleri OJSC for a total amount of 16 million manats. Today, active work is underway to place these bonds.
The securities market is an opportunity for issuers to raise additional funds for the development of their business, and for investors (individuals and legal entities) to protect and increase their personal savings or free funds. The Ashgabat Stock Exchange was established in 2016 and operates as a leading organization for the formation of the capital market in the country.
Nedir Agabaev, National Securities Market Development Expert of the USAID business environment development project in Turkmenistan (FGI) and the Ashgabat Stock Exchange