Hayk Yeganyan. Armenia Securities Exchange Is Modernizing

YEREVAN, Armenia - Nov. 18, 2019 - PRLog -- Hayk Yeganyan, CEO at Armenia Securities Exchange (https://amx.am/en/4/about-us) (AMX), shares insights and provides a look at future plans in an interview with Banks.am.

- Mr. Yeganyan, the local bond market has recently grown. What dynamics of growths have you recorded regarding the number of issuers and market members, as well as market value?

- In 2014, there were only 13 corporate bonds traded on the exchange whereas now over 80 bonds by 19 issuers are being traded in the market. The main factor affecting this growth is that the Central Bank introduced incentives to support banks, making bonds a more profitable investment than deposits. In 2016, there were 23 corporate bonds with a total market value of AMD29 billion. A year later, the market value surged 238%, with the number of bonds doubling.

The growth continued in 2018 and the corporate bond market value increased by 56% as compared with 2017's results. This October we observed the market value totaling over AMD180 billion.

Traditionally, banks attract low-interest deposits and loans and then offer loans with much higher interests. To assure depositors that their assets are safe, the Central Bank of Armenia has set minimum reserve requirements.

For bonds the minimum reserve requirement is much lower when the security is listed. This is why raising capital through debt is a more attractive proposition for banks. The incentives offered by the Central Bank obviously have a positive impact on the market.


- How important do you think it is to promote the concept of employee stock ownership in Armenia? How can Armenia Securities Exchange(https://amx.am/en) and Central Depository of Armenia (http://cda.am/) help in this regard?

- Employee stock ownership is an excellent instrument for tech companies. In this respect, Armenia has a comprehensive law on securities that partially regulates the use of this financial instrument. Yet, the major regulation laying down the rules and principles for employee stock ownership is the law on joint-stock companies that I believe needs amendments.

Tech companies that will restructure as open joint-stock companies and issue stock options can then use options as incentives. This will empower employees to be more productive and dedicated because the more developed the company, the higher the stock price.

Issuing employee stock options will have only positive effects on the economy. But the promotion of the concept also requires creating tax incentives for companies. Employee stock ownership is not common practice in Armenia because companies are not well-informed. We plan to hold discussions with them to advance the concept locally.

The interview was originally published on banks.am (https://banks.am/am/news/interviews/18108) on November 12, 2019.