The Warsaw Stock Exchange will pay 873 million AMD (US$1.948) to acquire 65.03% of  the Armenian stock exchange 

90.05% of the shares of the exchange (Armenia Securities Exchange - AMX), currently belong to Armenia’s Central Bank (ACB). The rest is owned by the stock exchange. After the deal with the Warsaw Stock Exchange, the ACB will maintain a 25.02% stake, the remaining 9.95% will remain shares of the Armenian Stock Exchange.

The ACB is confident that the entry of the Warsaw Stock Exchange will give a new impetus to the development of the Armenian capital market. However, some economists and experts are reluctant to go so far in their assessments.

The development program developed by the Warsaw Stock Exchange envisages measures for the development of capital market infrastructure, including the development of the trading system, the expansion of the stock exchange and Central Depository services and the introduction of the latest technological solutions.

"Corruption and the shadow economy are the most serious obstacles for the Armenian stock market"

Economist and investment consultant Karen Mikayelyan believes that such cooperation is positive for the Armenian Stock Exchange, as well as for the country’s entire financial system, but one should not have high expectations.  

"It can bring new investors, new services, such as mutual listing opportunities, technologies and new recognition. But I do not have high expectations, because we do not offer securities. They are few. The main part (about 140 out of 150 listed securities) are bonds, a debt tool, an alternative to bank loans and deposits. Since those who invest in most government and corporate bonds are exempt from income tax as prescribed by law, some dynamics are observed in the market. As for the stock market, the prices of the latter do not change significantly. No tangible dividends are observed. It is a direct reflection of Armenia's economic environment," the economist told Hetq.

Mikayelyan believes corruption and the shadow economy are the most serious obstacles for the Armenian stock market. 

“Even cooperation with the New York Stock Exchange will not save the Armenian stock exchange,” he told Hetq.

The capital market in Armenia is not developed for many reasons. Apart from the shadow economy, monopolies and corruption, the culture of corporate governance is not rooted in companies.

He argues that people in Armenia prefer to invest in real estate rather than in stocks, adding that business owners are reluctant to let “strangers” invest in their companies.

Mikayelyan believes that one possible way to develop Armenia’s stock exchange is to obligate some large companies to list their shares on the stock exchange.

He adds that such companies do not list their shares on the exchange because they see this as an added “control mechanism” to monitor their finances.

“Business owners in developed economies seek to be listed on the stock exchange,” he said, noting that monopoly business owners in Armenia prefer to maintain total control of their companies.

The Armenia Securities Exchange (AMX) is the only securities regulated market operator in Armenia. 

Shares, government and non-government bonds (including corporate bonds denominated in foreign currency), deposit receipts, investment fund units, foreign currency and credit resources can be traded on the securities exchange. 

Twenty-one companies, mostly banks and mortgage agencies, are currently listed on the AMX.