FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
NASDAQ OMX ARMENIA
Armen Melikyan
Chief Executive Officer
Joining the family of NASDAQ OMX
companies in February 2008 has opened a
new page in the history of the Armenian Stock
Exchange. Much of the year 2008 was focused
on integration processes: Armex, as well as
the Central Depository of Armenia that also
became a part of NASDAQ OMX, gradually
implemented standards of activities, policies,
and procedures applied by the world’s largest
exchange operator. The NASDAQ OMX brand
was registered in Armenia and has now fully
replaced the old logotype and branding of the
exchange and the depository.
As the final milestone of the integration
process, on December 2, 2008, a new set of
Armex and CDA rules was registered by the
Central Bank of Armenia. The new versions of
the rules reflect policies and criteria used by
NASDAQ OMX across the world. Especially
worth noting here are the requirements for
corporate governance practices and
transparency of listed companies, which are
aimed at enhancing investor protection.
Trading rules have also been brought in
compliance with the best international
practices that promote fair trading and pricing
on the exchange market.
HISTORY AND DEVELOPMENT
Armenian Stock Exchange (Armex) is the
successor of the Association of Securities
Market Participants, which was established in
Armenia in 1997, and is currently the only stock
exchange registered in Armenia. Armex was
initially registered the Securities Commission of
the Republic of Armenia (RA) on 13 February
2001, as a self-regulatory organization. In
November 2007, according to the newly
adopted “Law on Securities Market”, Armex
was reorganized into an open joint stock
company.
Until 1 January 2006, Securities Commission of
RA was the competent state authority to
regulate the activities of capital market
including the stock exchange in Armenia.
However, with the enactment of a new law
introducing unified regulatory authority for the
financial market, the regulatory and supervisory
powers of the Commission were transferred to
the CBA.
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In 2008, NASDAQ OMX Armenia also
strived to streamline and automate internal
procedures to ensure even higher quality of
services rendered to exchange members
and market participants.
In 2008, NASDAQ OMX Armenia also strived
to streamline and automate internal
procedures to ensure even higher quality of
services rendered to exchange members and
market participants. As a result of these
efforts, manual depository processes were
automated and exchange trading hours
extended. Armex also introduced two new
markets – for Government bonds and for
REPOs. A mechanism for manual trades was
also implemented to better meet the business
needs of market participants.
On the business side, NASDAQ OMX Armenia
recorded good growth in all areas: five new
members joined the stock exchange bringing
the total number of members to 19; there was
an increasing number of corporate bond
listings throughout the year; value traded has
increased in most of the markets. By year-end
market capitalization reached the equivalent of
US$ 177 million – a 68% increase compared
to the end of 2007. Trading activity in the stock
market remained low, but trading volume and
the number of trades in the corporate bonds
market saw a more than three time increase
over the previous year. Foreign currency
trading was also at an all time high, exceeding
Since 15 November 2005, foreign currency
trading was introduced on Armex, which
proved to be in demand: volumes of FX trading
to date greatly exceed those of other
instruments. On 14 December 2005, the first
publicly traded corporate bonds were listed at
Armex, and as of December 2008, 13 bond
issues were traded on the stock exchange –
most of them having market makers. In early
2008 government bonds trading was launched,
as well as status of market-maker for
government bonds was introduced. By the end
of 2008, Armex introduced new market for
REPO (repurchase agreements), as well as a
mechanism for manual trades.
Armex, as well as the Central Depository of
Armenia, is currently part of the NASDAQ OMX
Group. In November 2007 members of CDA
and Armex transferred their shares to the CBA,
and OMX Group acquired 100% thereof. After
in late February 2008, NASDAQ completed its
combination with OMX, Armex became an
entity fully owned by NASDAQ OMX.
the equivalent of US$ 1.1 billion - a 32%
increase compared to value traded in 2007.
NASDAQ OMX Armenia sees the promotion of
new IPOs and stock listings as its primary task
for 2009. Positive developments in the
corporate bonds market observed in 2008
provide good reasons to expect growth also in
the stock market. To this end, NASDAQ OMX
Armenia works proactively with potential
issuers and brokerage companies, offering its
expertise and assistance in all matters related
to going public and getting listed. Importantly,
Armenian capital market has been indicated
as an attractive investment target by both local
and international investors, and it is vital that a
sufficient number of high quality liquid
instruments be available to meet this interest.
Overall, this year NASDAQ OMX Armenia will
continue pursuing its main objective – to
develop the Armenian securities market
through innovation, technology improvement
and close cooperation with all stakeholders in
the market.
FUTURE OUTLOOK
In 2009, Armex plans to:
• rename and re-register Armenian Stock
Exchange as “NASDAQ OMX Armenia”;
• further automate information processing and
launch a new comprehensive website;
• continue improving the technical
infrastructure of the stock exchange;
• launch T+3 settlement mechanism, which
will enable exchange trading without pre-
deposition of securities and cash;
• establish a Guarantee Fund to increase
investor protection;
• organize study tours for investment
companies and banks to facilitate introduction
of international best practices in Armenia;
• conduct study tours for journalists covering
financial market;
• continue efforts towards increasing public
awareness of the Armenian securities market.