YEREVAN, December 16. /ARKA/. The volume of bonds issued by financial and non-financial institutions in Armenia exceeds 700 billion drams, said Central Bank Chairman Martin Galstyan, responding to a question from the ARKA news agency about capital market development trends in the country.
“I can confirm that the volume of issues is somewhat above the planned indicators,” he mentioned during a press conference on Tuesday.
Galstyan pointed out that future actions should align with equity market development programs, which are expected to draw in new types of investors and facilitate their entry into the market, given that the necessary infrastructure is already in place.
“If we pursue the development of the equity securities market, I believe it will be advantageous for both businesses and investors,” he added.
At the same time, the Central Bank head highlighted another matter that requires careful attention.
“While registering the latest bond issue prospectuses with the Central Bank, we discovered that the leverage ratio (degree of debt – ed.) for bonds issued by partners in the real sector is notably high,” he remarked.
Galstyan clarified that the capital adequacy ratio for financial institutions should stand at 12%, which corresponds to a leverage of about 8-9%.
“Recently, we have observed that some partners in the real sector have a leverage ratio of around 17-19%. I believe there is potential for improvement among partners in the real sector: capital must be increased to allow for a proportional increase in debt. Investors should also remain vigilant and pay closer attention to specific financial indicators, as leverage carries inherent risks,” Galstyan stated. ($1 – 381.76 drams).-0-
