1. What are the main strategic initiatives that BCSE (Exchange) is currently working on?
The approaches to the development of the Exchange are determined taking into account the needs of our clients (market participants), the requirements of regulators, and the level of development of the domestic financial market. The development trends of our partners – foreign exchanges are also analyzed.
The scale and peculiarities of our financial market require us to resolve several key issues today:
First, to provide a full cycle of trading and post-trading services to our clients. We have already done this in the foreign exchange market. Currently, the BCSE not only trades in this segment but also acts as a clearing organization and settlement bank.
On the stock market, the BCSE is today the organizer of trades, conducts clearing and is the Central Counterparty for T + 0 trades. The possibility of performing the functions of a settlement bank is being considered. This will give an impetus for the further development of the institution of the Central Counterparty and will allow trading in a continuous mode without interruption for clearing settlements. It is also planned to launch new types of transactions with the Central Counterparty – REPO transactions and transactions with T + n settlements.
The second issue we are working on is expanding the circle of direct participants in exchange trading.
We are interested in participating in exchange trading in currencies not only for banks, but also for other legal entities – large industrial enterprises – exporters, and importers. In the future, we need to create the necessary working conditions for them (develop an effective risk management system, which with a high probability guarantees the completion of settlements, but at the same time is not burdensome in terms of financial costs; think over new settlement routes when making international payments; possibly, adapt trade terminals for the needs of new customers, expand the range of other services).
In the stock market, the BCSE actively promotes the idea of direct access to exchange trading for qualified investors, as well as the right of foreign brokerage companies to operate on the Exchange without obtaining an internal license.
The third direction of the BCSE development is expanding the range of financial assets traded on our site. In this connection, the preparation of local legal acts and the trading system for the launch of a new class of instruments is underway.
Along with the large-scale tasks, the BCSE takes part in the development and formation of the innovative economy sector in the Republic of Belarus. From 01.06.2020, a separate trading platform “Market of Innovations” has been created at the BCSE to organize the circulation of shares and bonds of companies implementing projects in the IT sector, biochemistry, start-ups that involve the creation of high-tech products in other industries. In the near future, we expect an increase in interest in this site from issuers and investors.
All of the above tasks are traditional, like for any exchange, associated with solving problems of technological development. The BCSE trading system is our own development. The growth in the number of clients and operations requires an increase in the productivity of its work, modernization of the core, modification of databases, development of open API technology, implementation of new technical solutions, creation of mobile applications for exchange products. Accordingly, this work is also of the most important strategic nature.
2. What instruments are most actively traded on the BCSE, have they changed recently?
Today, the Exchange serves 4 main market segments: currency, stock, money and derivatives markets. The total trading volume in the first half of this year in all segments reached BYN 22 billion, an increase of 16.5% compared to the first half of 2019.
The main driver of growth was the foreign exchange market, the volume of transactions in which amounted to BYN 12.7 billion, having increased by 78.8% compared to the first half of 2019. Traditionally, the most traded instruments are the USD / BYN, EUR / BYN, RUB / BYN currency pairs, as well as EUR / RUB and USD / RUB conversion deals. The share of the exchange currency market in the structure of the internal foreign exchange market of the Republic of Belarus increased to 16.6%.
The total volume of exchange transactions for the purchase and sale of securities in the first half of 2020 amounted to 2.4 billion BYN, which is lower than the corresponding indicator for the first half of 2019. At the same time, we expect the trading volume to recover after the start of the planned placement of government securities denominated in Belarusian rubles for this year.
The list of instruments admitted to placement and circulation on the Exchange’s trading floor remained unchanged and was presented: government bonds of the Republic of Belarus, bonds of the National Bank, other banks, as well as legal entities that are not banks; bonds of local executive and administrative bodies; shares of open joint-stock companies.
Compared to the first half of 2019, the volume of trading in shares increased almost 5 times and reached 96 million BYN. This growth is largely due to transactions involving strategic investors entering the capital of industrial enterprises, whose shares are traded on the BCSE.
The money market was dynamically developing this year, the volume of REPO transactions amounted to BYN 3.5 billion, having increased by 40% compared to the same period in 2019. Integrated REPO rates, depending on the type of bonds, varied in BYN from 8.05 to 8.95% per annum, in USD – 4.13%, in euros – 1.40%.
The Ministry of Finance continued the practice of placing budget funds, which was tested last year, using exchange deposit auctions. In the course of 26 deposit auctions, the volume of placed funds exceeded 4.2 billion BYN, which amounted to almost 20% of the total trading volume in all market segments.
No deals were made on the derivatives market this year.
3. The Eurasian Development Bank (EDB) is the first international financial institution to participate in the BCSE stock market, congratulations on this achievement. Are there any strategic plans to attract new international organizations?
One of the most important tasks is to expand the circle of professional participants in the securities market – non-residents, who, according to our legislation, may be granted the right to become participants in trading on the BCSE without obtaining an internal license. Today only international organizations can be such non-residents. We, for our part, make proposals and initiate amendments to the legislation that will allow broker-dealer companies accredited on the world’s leading exchanges to obtain rights similar to international organizations. Most likely, at the first stage, such companies will be given the right to serve external investors – non-residents of the Republic of Belarus.
At the same time, the BCSE is trying to create the most comfortable conditions for foreign companies to work on our site. This applies to both the development of trading, settlement and clearing systems, and options for technological access to trading. We develop technologies for access to trading systems and mechanisms for information exchange, using a variety of technical solutions, including those based on the FIX / FAST protocols, we solve the problems of multilingual service of information flows when disclosing data based on trading results.
In addition, work is underway to fill the quotation lists of the BCSE with securities of interest to non-residents, including shares of enterprises with a predominant share of state ownersh
4. The world today is facing some challenges, and how we all act in concert as a community will make a difference in moving forward. How do you encourage your employees to stay positive and avoid negativity in the workplace?
Working on the employees’ mood is not a reaction to the current situation in the world, it is one of the primary strategic objectives of the development of our company. The HR policy of BCSE is based on the principle of treating personnel as a long-term investment, as the main corporate resource. We are focused on building a cohesive effective team. We adhere to this principle in every HR process: we select and hire people who, first of all, are able to effectively interact, work in a team for a common result, and we invest, we create all the conditions in order to “grow” first-class professionals. We provide support and training to beginners without fail; we monitor the level of loyalty and involvement of our employees, we quickly respond to possible climate changes in the team; whenever possible, we try to create conditions for the balance of work and personal life of employees – most work in flexible working hours or according to an individual work schedule, at home or remotely.
Together with the trade union, we create a rich corporate life – together we celebrate holidays, hold teambuildings, go on tour rallies, travel around Belarus and Europe. Of course, the current situation has made its own adjustments, but our corporate life did not stop at this time, but went online. Today we are actively participating in various photography contests, we hold art contests for the children of our employees; at the same time tracking the efficiency and satisfaction of the team with a remote mode of work to make timely decisions. Well, the simplest, and at the same time, the most important thing for maintaining a positive workplace – we communicate! Our meetings and meetings have moved online, where we discuss ideas, emerging issues and ways to solve them, praise and constructively criticize, and, of course, jointly rejoice in victories!