ARMENIAN SECURITIES MARKET SHOWS SIGNS OF REVIVAL
news.am
Nov 13 2009
Armenia
Numerous Armenian companies are ready to issue shares, but they are not
sure the capital market and public trust securities, Armen Melikyan,
Director General of NASDAQ OMX Armenia told NEWS.am. According to
him, bonds of ten companies and shares of 11 companies are currently
listed on NASDAQ OMX Armenia. Melikyan pointed out a number of reasons
for the underdevelopment of Armenia’s securities market. First, the
capital market and the public do not trust shares. "In 1993, when
the privatization process got under way, people were not informed
of what a share was. Later, securities were bought from them dirt
cheap. Time passed and the same people learnt that a share they sold
at 500 Armenian drams is worth 200 U.S. dollars now," Melikyan said.
Another problem is the lack of money on the capital market. The
companies issuing shares may have doubts about yield because of scanty
demand. Melikyan pointed out some movement on the securities market
from early 2008. "Companies began issuing bonds. That enabled them
to repay high-interest bank credits, and they were thus changing the
credit structure," Melikyan said. Since mid-2008, however, as the
global crisis was developing, the activity has been getting lower.
Melikyan said that the financial crisis made foreign investors, who
are mostly shareholders in the companies issuing shares, suspended
their investments in the Armenian economy.
"We expect activity on the exchange from mid-2010, as economic recovery
is expected in many countries," Melikyan said. He believes pension
reforms will boost the Armenian capital market as well.