At the initiative of Converse Bank, a panel discussion titled: ‘Capital Markets, Challenges and Development Prospects’ will be held as part of EBRD's annual meeting. We talked about this with Grigori Zakaryan, the Director of the Investment Department of Converse Bank.
Mr. Zakaryan, what is the reason for choosing this topic?
Capital markets as such, the developments taking place in them, and emerging trends have a significant mutual impact on the particular countries’ economies and the global economy. In general, the wealth, which is formed or, if you like, "produced" along with economic development, needs to be effectively managed, which in a broad sense is the duty of the financial industry management. This wealth flows into capital markets, forms their basement, and dictates its own rules for the progress. Moreover, in a broader context, capital markets are influenced not only by the course of large economies central banks’ monetary policies but also by important geopolitical events. We have no shortage of such events, so we attach great importance to analyzing capital markets in order to comprehend the developments taking place in them and to make certain forecasts.
How would you describe Armenia’s capital market? What are the main challenges and what development prospects do you see?
The capital market in Armenia is a newly emerging and developing institution with unique opportunities and challenges for development, such as: a lack of instruments in the financial market, as well as a shortage of issuers of securities, a weak desire to enter the capital market, limited investment opportunities, etc. Currently, the money market and debt securities market is developing at a faster pace, the main participants of which are financial institutions, i.e. the banks. There are also several issuers of equities whose participation cannot be overestimated, as they will have a fundamental impact on the course of further development.
As for the prospects, I think the development of Armenia’s capital market will depend on a significant increase in the number of new issuers and issues, and on how the process of bringing companies to capital markets turns out.
Preconditions are being established, such as: new participants emerging, there is a certain demand for the creation and launch of capital market products, financial institutions providing investment banking services, and other steps are actively taken in these directions.
How will the development of the capital market affect the economy in Armenia?
To put it very briefly, it should be noted that without the establishment of this institution, it’d be hard to imagine broader sustainable economic development. It is an indispensable source of liquidity, long-term money and fund-raising capability in various risk profile economic sectors, especially for capital-intensive companies. The capital market is one of the economic pillars of the country, therefore, its establishment and integration into global markets is a good platform for Armenian businesses.
What is Converse Bank's policy in this matter?
As one of the leading financial institutions in Armenia, we also share the responsibility of creating and developing this market. At this stage, we support companies from various sectors of the economy in the process of issuing and placing their securities, acting as market makers for different securities, developing digital infrastructures for investing in securities, etc.
What do you expect from the panel discussion?
Given the professional expertise of the colleagues involved, an interesting and productive event awaits us, during which we will discuss not only issues related to Armenia’s capital market but also international experience related to developing and overcoming challenges of those markets.
