EBRD and EU, together with Galt & Taggart and Ameria Management Advisory launch a programme to support the Armenian capital market
YEREVAN, December 11. /ARKA/. The European Bank for Reconstruction and Development (EBRD) and the European Union, in collaboration with Galt & Taggart and Ameria Management Advisory, are launching a program to support the Armenian capital market, valued at approximately 500,000 euros.
"The development of the capital market is one of the most important factors in the investment sector and is essential for Armenia's financial depth. Today, the EBRD is launching a technical assistance program. The tender was awarded to a consortium of two companies, Galt & Taggart (Georgia) and Ameria Management Advisory," said Tigran Jrbashyan, head of the Ameria consulting company, at a conference marking the program's launch.
According to him, the goal of the program is to encourage and develop the capital market, foster the emergence of new issuers, enhance legal opportunities, and implement reforms.
"A serious task has been set to identify barriers to market development. There are challenges for both issuers and potential investors," said Jrbashyan.
He noted that although the Armenian capital market has developed significantly in recent years, the task of informing the public about risks and opportunities remains crucial. This requires comprehensive work with both issuers, potential investors and shareholders.
Answering a question from the ARKA news agency about his assessment of the current state of the Armenian capital market, Jrbashyan noted that “interesting developments are being observed”.
"The bond market is developing quite actively. This year, we will see an unprecedented volume of bond turnover on the stock exchange. Bonds have become the main driver and engine of the capital market today. As for stocks, there are issues in this area," said Jrbashyan.
He noted that although there are 11 registered issuers listed on the stock exchange in Armenia, their turnover remains very small and limited.
"We cannot say that we have a developed stock market, unlike the bond market. We likely need to find innovative solutions and attract instruments from financial institutions and the government. This is currently under discussion, and I cannot disclose the details yet," said Jrbashyan.
EBRD optimistic about program implementation in Armenia
"Armenia is the second country in the Caucasus where this program is being implemented. It was first launched in Georgia, where very positive results were observed in the securities market. We hope that the results in Armenia will be equally positive," said Rada Tomova, Associate Director - Capital & Financial Markets Development at European Bank for Reconstruction and Development (EBRD)
According to her, the program will give a boost to the further development of Armenia's capital market.
“The funds allocated for this program total approximately 500 thousand euros," Tomova said in response to a question from the ARKA news agency.
She also responded to the agency's question regarding the EBRD's assessment of the development of the Armenian capital market.
"Since 2021, we have observed significant progress in terms of financial mechanisms, securities, and other financial instruments. We can say that Armenia is ready, but measures to develop the capital market still need to be implemented," Tomova said.
She identified the lack of financial support as the main issue.
The head of the EBRD Yerevan office, Giorgi Akhalkatsi, in response to a question from the ARKA news agency about Georgia’s experience after implementing a similar program, stated that it is particularly important for small and medium-sized businesses, as these companies are the ones seeking alternative sources of financing.
"As a result of the program's implementation, the development of the securities market in Armenia is expected. When we started in Georgia, the number of issuers was quite small, but we managed to double it. We are aiming to do the same in Armenia," Akhalkatsi said.
Armenian ministry of economy highlights issues in the capital market
Deputy Minister of Economy of Armenia, Sevak Mikaelyan, stated that the Armenian government considers the capital market one of its most important priorities.
“There are many problems in the Armenian capital market at the moment. First and foremost, I would like to highlight the issue of insufficient information and the lack of a proper culture. Traditionally, the banking system and loan-based financing have dominated in Armenia," Mikaelyan said, responding to a question from the ARKA news agency about the main obstacles hindering the development of the capital market in Armenia.
According to him, it will take time for businesses to adapt and understand how to attract capital from the market.
"In recent years, we have seen numerous issuances, especially in corporate markets. This gives hope that the process has already been initiated. Such programs will help catalyze it," Mikaelyan said.
As the second issue, he highlighted concerns related to transparency and reporting. The Deputy Minister emphasized the importance of corporate governance in this context.
"This year, the Minister of Economy approved a new Corporate Governance Regulation that aligns with international standards. If companies begin to gradually implement it, this will open up vast opportunities in the capital market," Mikaelyan said.
About the Armenia capital markets support programme
The programme, implemented by the EBRD and the EU in partnership with Galt & Taggart and Ameria Management Advisory, in cooperation with the Ministry of Economy of Armenia, aims to support Armenian companies issuing bonds and securities through grant co-financing of specific expenses.
The programme will be governed by Armenia's legal framework and will be built upon the capital markets infrastructure. This will broaden the financing sources for local companies and help attract investment from both local and international investors, contributing to a more resilient and flexible private sector in Armenia, which will foster economic growth.-0-
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