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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2006
ARMENIAN STOCK EXCHANGE
Yermonya Vardevanyan
Chairwoman
The greatest achievement of the Armenian
Stock Exchange in 2005 is the launch of the
long anticipated exchange trading in
foreign currency.
The greatest achievement of the Armenian
Stock Exchange (Armex) in 2005 is the
launch of the long anticipated exchange
trading in foreign currency. This is an
extremely important milestone in view of the
expansion of the 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.
To make this remarkable event happen,
significant changes in legislation regulating
Armenian securities market, and the Armex
rules, were required. This was accomplished
successfully, to a great extent owing to the
continuous support from the Central Bank of
Armenia. Besides, the efforts by the Armex
team made it possible to get the electronic
trading system fully adapted to the
requirements and special features of the
local foreign currency market, and ensure
the smooth course of the trading process.
As a result, between the first trading session
held on 15 November, 2005, and year-end,
value in US Dollar and Euro equivalent to
over US$ 21 million was traded on Armex.
Trading in corporate securities also
continued in 2005. Although compared with
last year 2005 saw a 1.3 times decrease in
the value of trades to US$ 1.34 million, this
market was also marked by a notable
achievement: the first ever corporate bonds
were issued and placed through the Armex
trading platform. Yet more placements of
corporate bonds by leading local companies
are expected throughout 2006. We regard
development of the corporate debt market
as a crucial objective, since investor and
issuer success stories observed here will
naturally promote the revival of the primary
and secondary equity markets.
The Armex sees the introduction of the
secondary trading in Government securities
as one of its primary goals for 2006.
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,
2006.
Of course, the Armex will carry on with its
efforts aimed to facilitate further development
of the exchange market. These include
improvement of the structure and
accessibility of corporate information
disclosed to the public, as well as fostering
of corporate governance practices among
listed companies. Bearing in mind the
enormous 13.9% economic growth that
Armenia demonstrated in 2005, the Armex
intends to do its best to get local capital
market play an efficient and sustainable roles
in the future development of the country.
HISTORY AND DEVELOPMENT
The 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 Armex, and on 13th
of 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”.
The Armex is the only stock exchange
registered in Armenia. As a voluntary
association of broker (dealer) companies
and a self-regulatory organization,
the Armex approves rules and regulations
covering its core activities, including listing,
trading, information disclosure, as well
as rules of professional ethics. The selfregulation
principle provides each member
company with equal rights to participate in
the management of the stock exchange.
The supreme management body of
the 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.
The 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
1st January, 2006, the regulatory and
supervisory powers of the Commission
will be transferred to the newly established
relevant division within the Central Bank
of Armenia.
Until recently, only equities were traded
on the Armex. However, as a result of the
joint efforts of the stock exchange and
the Central Bank of Armenia, on 15th
November, 2005, foreign currency trading
was introduced on the Armex, which is
considered to be an important step towards
the further development of the exchange
market in Armenia.
FUTURE OUTLOOK
In 2006, the Armex plans to:
• introduce trading in government bonds;
• facilitate the launch of trading in securities
on a non-covered basis;
• continue efforts aimed at the
establishment at the Armex of 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;
• undertake steps to increase public
awareness of the Armenian securities
market; and
• expand regional and international
cooperation
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