YEREVAN, February 10. /ARKA/. Armenia should develop and expand its Eurobond issues, IMF resident representative to Armenia Tereza Daban said at a conference entitled “Armenian capital market: New opportunities and challenges” in Tsakhkadzor Friday.
Issuance of Eurobonds was Armenia’s first step to enter the global market, Daban said.
On September 19, 2013, Armenia issued its debut Eurobonds for a total of $700 million, with a maturity period of 7 years and yield at 6%. The main underwriters of the issue were Deutsche Bank AG, London Branch, HSBC Bank plc and J.P.Morgan Securities plc. The demand for the first dollar bonds went beyond the $3 billion threshold.
The first transaction worth $300,000 was effected on January 31, after the bonds were listed on NASDAQ OMX Armenia for trading.
Along with yield and new resources, the Eurobond issue contains many challenges, Daban said.
Till now Armenia has been isolated from global shocks due to its weak global linkages. The country was mainly using loans, various kinds of cooperation and investments to meet its financial needs, Daban said.
But, according to IMF representative, what is important is to understand how to ensure capital inflow to diversify financial sources and make Armenia a more attractive country on the global financial market map.
Daban said a clear strategy should be developed to assess all advantages and disadvantages of the system as inflow of major financial resources may inflict negative impact, increase in prices for estate property in particular, and increased tensions in competition.
According to Daban, making its economy open for larger portfolio investments Armenia will get a new potential source of financing that requires reasonable management.
Development of capital market is extremely important and requires certain economic performance, legislation framework, playing by certain rules, stability, stronger political framework, predictability and banking supervision, as well as some macroeconomic tools, Daban said. –0–
