YEREVAN, February 19. /ARKA/. Armenia’s investment climate is undergoing significant changes, and the financial market is becoming more active. Armen Hovhannisyan, head of investment banking at Dimension Investments, speaks in an exclusive interview with ARKA news agency about the barriers to development, tools for accelerating growth, as well as the prospects of venture capital.
ARKA – How would you assess the current investment climate in Armenia?
Armen Hovhannisyan – There have been sufficient changes towards improvement, if we compare the current state with what we had 5-8 years ago.
ARKA – What are they?
A. Hovhannisyan – The authorities are taking certain steps, using appropriate tools. This is often criticized, but, in general, the goals and orientation are correct. The government is doing its part, there is a good base of experts, but I am mainly referring to the market participants, who have become more aware of the problems that need to be solved.
ARKA – What are the main barriers for the development of capital market in Armenia?
A. Hovhannisyan – Basically, the financial market participants should act more boldly and actively. Only this. We can list a lot of secondary issues, but the primary one is this – the desire and will to step up activities in the market.
ARKA – What is the role of Armenian Stock Exchange in this process?
A. Hovhannisyan – Over time its role will increase. The arrival of the Warsaw Stock Exchange brought certain changes. In terms of experience and technology exchange, the Warsaw Stock Exchange is one of the largest in Eastern Europe. They are experienced, have a good command of exchange tools. I think Armenia will only benefit from this cooperation.
ARKA – What financial instruments and initiatives can stimulate the development of the stock market in Armenia?
A. Hovhannisyan – First of all, at this stage the main instruments for the development of the financial market are shares and bonds. There can be more complicated instruments, but at the initial stage – these are the ones.
ARKA – How do you assess the prospects of attracting venture capital, particularly in the Armenian technological sector?
A. Hovhannisyan – As very good. Venture capital is very active in Armenia. At different stages of financing there is a need for strengthening, not in terms of amounts, but in terms of deals, to establish cooperation with companies. At the stage of venture capital there is quite good activity. Compared to neighboring countries or post-Soviet states, we have quite an active venture capital market with its own participants.
ARKA – How do technological trends, in particular, blockchain or AI influence the activities of investment companies?
A. Hovhannisyan – To date, I have not encountered any opportunities for their application, except for analyzing issues. This does not mean that there is no such thing, perhaps something is under development, and in the near future at some stage of investment activity some processes will be replaced by AI and blockchain. But right now I don’t really see much of an application other than analytics.
ARKA – Earlier Hayk Yeganyan, Director of the Armenian Stock Exchange, said that the development of the capital market in Armenia is partially hampered by the lack of qualified financial intermediaries, investment banks and brokers. Do you agree with this and has the situation changed now?
A. Hovhannisyan – Now the situation has changed. The market is much more active. We are constantly making placements. The dynamics has significantly increased. Our financial market, in general, if we look at it in terms of banks, is quite successful. The Armenian banking system is quite strong. If we compare it with the post-Soviet countries, except for the Baltic States, the Armenian banking system is of very high quality both in terms of its assets, compliance and innovation. Our banks are in good condition, we just need to work on capitalization and move forward – to develop the financial market, investment sphere. -0-
