Stock Exchange – The reason or outcome of crisis?

By Tea Shvelidze

The crisis has already involved about all of the stock markets worldwide. However, Georgian Stock Exchange is far from it yet, as it’s strange for most of us, because of Soviet mentality considering the term “market” as the “horror” of capitalism.

The part of population that owned the bonds issued by Soviet Union thinks that it is the only kind of stock and does not notice that possesses the funds of some company, which is caused by the environment that country distributed shares with different method, moreover, according to Law on Securities of Georgia, stocks are dematerialized (is not published and is included only in register). Though, normally, shareholders are idle, sit by and waiting for dividends like “chickens counted after they are hatched”. With this experience, it is natural that many in our country even do not imagine what are the people of developed countries afraid of.
Stock market regulation first appeared in US. New York’ s the most aged stock market is now 208 ears old. After crash in 30’s, morally and materially suffered investors required from state to regulate the market. In 1932, after winning the presidency, Roosevelt called for some professors from Harvard University to prepare the Law on Securities. In 1933, US Congress approved it. In 1934, Congress enacted the Law on Stock Markets establishing also the first regulating commission. As the first Chairman of the above commission, appeared John Kennedy’s father Joseph Kennedy. In 60’s John Kennedy asked Commission to investigate the market after, which Congress assigned the Investors Rights Act.
Georgian stock society formed in 1991. In 1999, basing on stocks and exchange supervising inspection at the Ministry of Finance of Georgia, government has established the National Commission for Securities of Georgia, which periodically calls for meeting in regional areas of country to let young investors get familiar with Legislative Basis for stocks and exchanges.
Small shareholders often pretence that are unprotected. Some are even unaware of the quantity it owns in company. Right these are the questions the above meeting intends to answer. To get information about stocks, applicants have to fill the registration form, which lately will be passed through the commission and registrar. There are 6 independent registrars in Georgia at the moment. According to Law on Securities, Companies with more then 100 shareholders owe to run the shares roll with an independent registrar. As Commission informs, 379 Georgian organizations owe that nowadays, 239 of which are trading in Georgian Stock Exchange. Licensed brokers those are 37 now in Georgia, as usually, carry out trades.
Unfortunately, none of them operates in Internet. Moreover, participants’ behave on the exchange mostly look like compellation. Despite tremendous efforts by USAID and Barents Group, our stock market is still in stage of embryo, as the cause of which serves the nonexistence of Joint Stock Companies and weak development of market relations in common. Thus, it may have other encouraging: while foreign exchange markets suffer from crisis, Georgian one holds strong. Wonder if we are in case of those.