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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT APRIL 2007
ARMENIAN STOCK EXCHANGE
Yermonya Vardevanyan
Chairman of the Observers’ Board
Bearing in mind the enormous 14% economic
growth that Armenia demonstrated in 2006,
Armex intends to do its best to have the
local capital market play an efficient and
sustainable role in the future development of
the country.
The greatest achievement of the Armenian
Stock Exchange (Armex) in 2006 is the
launch of the long anticipated exchange
trading in corporate bonds and the ongoing
growth in foreign currency trading volumes.
This is an extremely important milestone in
view of the expansion of Armex activities and
development of the exchange market, on the
one hand, and the increased transparency in
foreign exchange pricing, which would
promote a better investment environment in
Armenia, on the other.
Securities trading at Armex was very notable
in 2006. Equities trading showed an
overwhelming 355.29% growth of value
traded. Value traded in the corporate bonds
market amounted to US$ 1.32 million,
against almost a full absence of trades in
2005 and we do think that it will contribute to
further development of the corporate bonds
market and will expand the diversification of
instruments traded at Armex.
The FX market since its establishment in
2005 has also shown rapid growth rates–in
2006 a value equal to US$ 347 million and
EUR 441 thousand was traded. The above
data once more proves that Armenia
has great potential for capital market
development and that Armex has a crucial
role in this process.
Armex sees the introduction of the secondary
trading in government securities as one of its
primary goals for 2007. Collaboration with
the stakeholders of the process, including
banks and licensed dealers, is currently
underway, and the task is scheduled for
completion by early H2, 2007.
Of course, Armex will carry on with its efforts
aimed at facilitating further development of
the exchange market. These include
improvement of the structure and
accessibility of corporate information
disclosed to the public, as well as the
fostering of corporate governance practices
among listed companies. Bearing in mind
the enormous 14% economic growth that
Armenia demonstrated in 2006, Armex
intends to do its best to have the local
capital market play an efficient and
sustainable role in the future development of
the country.
HISTORY AND DEVELOPMENT
Armenian Stock Exchange (Armex) is the
successor of the Association of Securities
Market Participants, which was established
in Armenia in 1997. In December 2000, it
was renamed as the Armenian Stock
Exchange, and on 13 February 2001
officially registered by the Securities
Commission of the Republic of Armenia as a
self-regulatory organization pursuant to the
Law of the Republic of Armenia “On
Securities Market Regulation”.
Armex is the only stock exchange registered
in Armenia. As a voluntary association of
broker (dealer) companies and a selfregulatory
organization, Armex approves
rules and regulations covering its core
activities, including listing, trading,
information disclosure, as well as rules of
professional ethics. The self-regulation
principle provides each member company
with equal rights to participate in the
management of the stock exchange. The
supreme management body of Armex is the
General Meeting of Members, which elects
the Observers’ Board. The latter elects the
Chairman and appoints the Chief Executive
Officer of the Exchange.
Armex is subject to regulation by the state.
The Securities Commission of the Republic
of Armenia has been the competent state
authority to regulate the activities of the
capital market, including the stock
exchange, in Armenia. Starting 1 January
2006, the regulatory and supervisory powers
of the Commission were transferred to the
Central Bank of Armenia.
Since 15 November 2005, foreign currency
trading was introduced on Armex, which is
considered to be an important step towards
the further development of the exchange
market in Armenia. On 14 December 2005,
the first publicly traded corporate bonds
were listed at Armex, which considered to
stimulate this market segment and expand
the diversification of instruments traded at
Armex.
FUTURE OUTLOOK
In 2007, Armex plans to:
• introduce a market-maker institute;
• introduce trading in government bonds;
• develop and introduce FX market trading
and new clearing mechanisms;
• expand regional and international
cooperation;
• facilitate the launch of trading in securities
on a non-covered basis;
• establish a Guarantee Fund to increase
investor protection;
• enhance the activities of the Armex
Training Center to conduct educational
seminars for trade participants,
broker/dealer community, reporting
companies and general public;
• develop and introduce capital adequacy
requirements for exchange member
companies; and
• undertake steps to increase public
awareness of the Armenian securities
market.
Ameria Invest
Armex member, business consulting
and law firm
www.ameria.am
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