and the public, generally, on capital markets operations and corresponding benefits. The level of transparency achieved by the project should not be undervalued given the prevailing adverse macroeconomic conditions that has shaken confidence in the banking sector and financial markets. It is also important to note, however, that there has been lower than originally expected market activity and participation due to these poor conditions. Uncertainty over the strength of the Manat as well as the viability of several large retail banks (following a series of attempted restructurings and liquidations) has dogged the domestic financial sector. Sub-Rating for Relevance of Implementation: Substantial Throughout project implementation, the SCS, Baku Stock Exchange, National Depository Center and the Bank remained committed to meeting project objectives and in spite of a challenging environment, substantially all objectives were met within budget and on time. The CMMP, has established a streamlined capital market trading platform underpinned by a revised legal framework and regulations that support its operations. However, the prevailing economic climate is not attractive to potential issuers of securities and more fundamental financial sector strengthening work is needed at this time. Related challenges such as instability of the banking sector and two currency devaluations had a negative effect on the banks’ ability to attract deposits. Several commercial banks have been declared insolvent and overall confidence in the financial sector is low. Measures to stabilize the financial sector, generally, are very much needed at this time. As mentioned above, WB is working with the GoA to develop an ASA package focused on financial sector stabilization to address these issues. 3.2 Achievement of Project Development Objectives Overall Achievement of PDOs Rating: Substantial The Project contributed to the overall development objectives, with gains made in most areas. Project contribution is broadly recognized and well appreciated by the GoA and significant advances in PDO outcomes were achieved despite considerable challenges. Responsible PDO Indicator Description End Target Actual Level of Rating – Institution Indicator (Approved) Result Achievement Definition (ICR’s Assessment) PDO: Increase the use of equity and corporate debt as financing and/or investment instruments through the adoption of an effective capital markets regulatory framework and infrastructure. Internal Increased Outstanding 3.80% 14.1% Fully achieved High Audit issuance of Amount of Department corporate Corporate Debt to of 2010 Non-oil SCS GDP Internal Increased Number of Listed 8-10 5 Partially achieved Substantial number of Companies Department companies of with listed SCS equity (cumulative) Internal Improved Ratio of 90% 100% Fully achieved. High Audit price Competitive Department transparency Transactions/Total of
and the public, generally, on capital markets operations and corresponding benefits. The level of transparency achieved by the project should not be undervalued given the prevailing adverse macroeconomic conditions that has shaken confidence in the banking sector and financial markets. It is also important to note, however, that there has been lower than originally expected market activity and participation due to these poor conditions. Uncertainty over the strength of the Manat as well as the viability of several large retail banks (following a series of attempted restructurings and liquidations) has dogged the domestic financial sector. Sub-Rating for Relevance of Implementation: Substantial Throughout project implementation, the SCS, Baku Stock Exchange, National Depository Center and the Bank remained committed to meeting project objectives and in spite of a challenging environment, substantially all objectives were met within budget and on time. The CMMP, has established a streamlined capital market trading platform underpinned by a revised legal framework and regulations that support its operations. However, the prevailing economic climate is not attractive to potential issuers of securities and more fundamental financial sector strengthening work is needed at this time. Related challenges such as instability of the banking sector and two currency devaluations had a negative effect on the banks’ ability to attract deposits. Several commercial banks have been declared insolvent and overall confidence in the financial sector is low. Measures to stabilize the financial sector, generally, are very much needed at this time. As mentioned above, WB is working with the GoA to develop an ASA package focused on financial sector stabilization to address these issues. 3.2 Achievement of Project Development Objectives Overall Achievement of PDOs Rating: Substantial The Project contributed to the overall development objectives, with gains made in most areas. Project contribution is broadly recognized and well appreciated by the GoA and significant advances in PDO outcomes were achieved despite considerable challenges. Responsible Institution PDO Indicator Description – Indicator Definition End Target (Approved) Actual Result Level of Achievement (ICR’s Assessment) Rating PDO: Increase the use of equity and corporate debt as financing and/or investment instruments through the adoption of an effective capital markets regulatory framework and infrastructure. Internal Audit Department of SCS Increased issuance of corporate Outstanding Amount of Corporate Debt to 2010 Non-oil GDP 3.80% 14.1% Fully achieved High Internal Department of SCS Increased number of companies with listed equity (cumulative) Number of Listed Companies 8-10 5 Partially achieved Substantial Internal Audit Department of Improved price transparency Ratio of Competitive Transactions/Total 90% 100% Fully achieved. High