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.