Armenian companies’ desire to conduct IPOs killed by absence of business motivation, NASDAQ OMX director says

YEREVAN, December 18. / ARKA /. Armenian companies periodically show desire to conduct IPOs and issue shares, but their desire very often is killed by absence of business motivation, NASDAQ OMX Armenia Director Konstantin Saroyan said in an interview with ARKA.

"Armenian businesses seek primarily credit resources because this tool is more familiar and understandable and secondly, because it does not suppose transparency regulation requirements. The securities market suggests not only control on part of the Exchange and the Central Depository, but on part of investors too," he said. 

On the other hand, according to him, there are bonds with softer requirements that are easier for investors and issuers to understand. 

This in mind he says this mechanism should be used to develop securities market and conduct IPOs. 

"Companies start issuing bonds, adopt certain regulations, get adapted and used to reporting their results, after which it is easier to explain the benefits of shares. This transformation mechanism can be used to conduct IPOs,’ he said. 

NASDAQ OMX Armenia is the name of the Armenian Stock Exchange ojsc (renamed on January 27, 2009), however, it is also used to refer jointly to the stock exchange and the Central Depository of Armenia (CDA), as the both companies have been members of the NASDAQ OMX Group, Inc. since early 2008. NASDAQ OMX Armenia and the CDA are the major securities market infrastructure institutions in Armenia. Since their inception in 2000, both companies had operated as self-regulatory organizations established by member broker companies, up until demutualization in 2007. NASDAQ OMX Armenia is a part of the world's largest exchange company, the NASDAQ OMX Group, Inc. -0-