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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2011
NASDAQ OMX ARMENIA
Armen Melikyan
Chief Executive Officer
In 2011, as the recovery gets underway both
globally and locally, NASDAQ OMX Armenia
will continue to be proactive in its relations
with the capital market stakeholders.
Among major achievements of 2010 was
introduction of credit resources market in April,
with launch of which the Exchange started
servicing interbank credits - another important
part of financial market. At present this market
is the most active at the Exchange with value
traded of US$ 1.5 billion and contributes to fair
pricing of overnight interbank loans. Corporate
securities trading was quite low this year,
though stock market saw a 30% increase of
value traded, which is quite notable taking into
account the fact that starting from 2006 this
market didn’t show any positive growth trend.
Government bonds trading was also active
with almost doubled value traded of US$ 15.5
mln, and the repurchase agreements (repo)
market showed an activity exceeding US$ 10.4
mln. Currency trading slightly decreased at
nearly US$ 0.7 billion in 2010.
At the year-end exchange market capitalization
stood at the equivalent of around US$ 144
million declining by only 0.9% since the end of
2010 – a relatively good performance
considering the lingering effects of the global
financial crisis.
In 2010, NASDAQ OMX Armenia was also
active in organizing many different kinds of
events. These were targeted to various
stakeholder groups – investment companies
and banks, listed companies, journalists – and
aimed at sharing international expertise and
implementing state-of-the-art standards of
respective activities in Armenia. General public
and especially younger audiences were also in
focus, with initiatives promoting awareness
about capital markets and their importance in
building a strong national economy.
Becoming the full owner of the Central
Depository of Armenia in 2009, NASDAQ OMX
Armenia kept concentrating on improving the
depository and clearing services – primarily
through continued automation and
optimization of business processes. The
Depository also worked closely with the
Government of Armenia to design and prepare
the implementation in 2014 of the fully funded
mandatory pension system, with volunteer part
starting in 2011. The launch of this new
second pillar pension system is expected to
boost the activity in the capital market
promoting the issue of new financial
instruments and bringing in institutional
investors.
In 2011, as the recovery gets underway both
globally and locally, NASDAQ OMX Armenia
will continue to be proactive in its relations with
the capital market stakeholders. One area of
focus will be to introduce new technology for
both the exchange and the central depository
business, to put in place the foundation for
continued growth. There will also be
continuous efforts to increase awareness of
the capital market in Armenia and support
market participants in meeting the awakening
demand for quality financial intermediation and
capital market services. Through such
processes NASDAQ OMX Armenia realizes its
primary objective – to maintain a fair and
effective marketplace where good companies
can raise capital and where investors can
make well-informed decisions while being
properly protected. Our commitment for 2011
is to continuously and consistently strive to
achieve this objective.
HISTORY AND DEVELOPMENT
NASDAQ OMX Armenia (formerly Armenian
Stock Exchange, Armex, renamed on 27
January 2009) is the only stock exchange
currently operating in Armenia. Armex was the
successor of the Association of Securities
Market Participants, which was established in
Armenia in 1997, and was initially registered
the Securities Commission of the RA on 13
February 2001, as a self-regulatory
organization. In November 2007, according to
the newly adopted “Law on Securities Market”,
Armex was reorganized into an open joint
stock company.
Until 1 January 2006, Securities Commission of
RA was the competent state authority to
regulate the activities of capital market
including the stock exchange in Armenia.
However, with the enactment of a new law
introducing unified regulatory authority for the
financial market, the regulatory and supervisory
powers of the Commission were transferred to
the CBA.
Since 15 November 2005, foreign currency
trading was introduced on Armex, which
proved to be in demand: volumes of FX trading
to date greatly exceed those of other
instruments. On 14 December 2005, the first
publicly traded corporate bonds were listed at
Armex, and as of December 2008, 13 bond
issues were traded on the stock exchange –
most of them having market makers. In early
2008 government bonds trading was launched,
as well as status of market-maker for
government bonds was introduced. By the end
of 2008, Armex introduced new market for
REPO (repurchase agreements), as well as a
mechanism for manual trades.
In April, 2010 NASDAQ OMX introduced new
market for credit resources trading, providing
exchange platform for interbank credits, a large
segment of the Armenian financial market, thus
contributing to the transparent and fair pricing
of credit resources, as well as equities, debt
instruments, and currency.
NASDAQ OMX Armenia is currently part of the
NASDAQ OMX Group. In November 2007
members of CDA and Armex transferred their
shares to the CBA, and OMX Group acquired
100% thereof. After in late February 2008,
NASDAQ completed its combination with OMX,
NASDAQ OMX Armenia became an entity fully
owned by NASDAQ OMX. On 5 June 2009,
NASDAQ OMX Armenia became the owner of
the 100% of the shares of the Central
Depository of Armenia.
FUTURE OUTLOOK
In 2011, NASDAQ OMX Armenia plans to:
• continue improving the technical
infrastructure of the stock exchange and the
central depository;
• continue expanding the range of services
provided to listed companies and trading
members;
• carry on with efforts to promote initial public
offerings of equities in the Armenian market;
• launch T+3 settlement mechanism, which
will enable exchange trading without predeposition
of securities and cash;
• establish a Guarantee Fund to increase
investor protection;
• continue efforts towards increasing public
awareness of the Armenian securities market.
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