ArmInfo.On its May 24 sitting, the Board of the Central Bank of Armenia gave its consent to the acquisition of the Armenia Securities Exchange by the Warsaw Stock Exchange. As noted in the message of the Central Bank, according to the agreement, theWarsaw Stock Exchange (GPW) will acquire 65.03% of shares of the Armenia Securities Exchange (AMX) (967 shares in total).
The Central Bank of Armenia will maintain 25.02% of shares, and the remaining 9.95% are the AMX's own shares. The value of the transaction will be about AMD 873 million, a part of which (about AMD 499 million) will be paid after signing the Share Purchase Agreement, and the rest, after completion of processes established by the Share Purchase Agreement.
The GPW announced about its plans to acquire the AMX in September 2020, after which necessary studies were carried out, a development plan for the next five years was developed, and necessary corporate approvals were obtained.
The Board of the Central Bank stresses the importance of the entry of the WFB as an institutional investor into the Armenian financial market, whichwill give an impetus to the development of Armenian capital market, and will foster integration of Armenian and Polish capital markets, opening new opportunities for both the Armenian companies and the investors.
Development program prepared by theGPW provides for a number of measures aimed at theimprovement of capital market infrastructure, including development of the trading system, expansion of the stock exchange andthe Central Depository services, as well as introduction of state-of-the-art technological solutions.
The GPW is the largest and the developed market in Central and Eastern Europe. The GPW organizes trading in stocks, bonds, derivatives, fund shares and other instruments. The GPW is a public company, the shares of which have been listed since 2010 with a capitalization of about 320 million euros. On September 18, 2020, the Board of Directors of the Warsaw Stock Exchange (WFB) and the Central Bank of Armenia signed a term sheet (agreement of intent with specific conditions) to acquire a 65% stake in the Armenian Stock Exchange (WFA). The share of the Central Bank of the Republic of Armenia in the capital of WFA at that time was 90.1%, and the exchange itself owned the remaining 9.9%. After the transaction, the Central Bank of Armenia will retain 25%, and 10% will be acquired by a third party appointed by the WFB.
Armenia Securities Exchange (AMX) is the only stock exchange operating in Armenia, which is also the sole shareholder of the Central Depository of Armenia. The mission of the AMX group is to contribute to the creation of a favorable investment climate in Armenia by offering effective solutions and services, including securities trading, clearing, settlement and management of pension systems.
It should be noted that the Armenia Securities Exchange (AMX) is the only operator of the regulated securities market in Armenia. AMX organizes trading in both securities and other financial instruments. The Armenia Securities Exchange is the holder of 100% of the shares of the Central Depository of Armenia. 90.05% of AMX shares are owned by the Central Bank of the Republic of Armenia, and the remaining 9.95% by the Armenian Stock Exchange.
After almost nine years of NASDAQ-OMX (from 2008 to 2017) as a shareholder of the Armenia Securities Exchange , the intentions of the Warsaw Stock Exchange are the second episode of interest in the AFB with a specific desire to become a majority shareholder. However, it is noteworthy that the funds for the modernization of the AMX software were provided by the Eurasian Development Bank (EDB), which at the beginning of 2021 allocated to the Armenia Securities Exchange a grant in the amount of about $260,000, through the Technical Assistance Fund, to finance the bulk of the costs for the modernization and implementation of technical means new trading system. In September 2021, the advantages of the already operating modernized trading system for government bond auctions were presented, as well as the trading system of the secondary market, which at that time was at the final stage of testing and implementation, and already at the end of 2021 a full launch took place. In addition to providing trading in the secondary market, the system, in accordance with international standards, allows investors to directly access the trading platforms of the exchange through stock brokers, as well as trade online through web and mobile applications.
Thanks to a partner in the face of the Eurasian Development Bank, the trading system becomes available to end investors, participation in exchange trading is simplified, and an attempt is made to influence the development of the capital market, creating an opportunity to increase the number of direct market participants. Proof of this is the fact that AMX has received the "Best Exchange in the South Caucasus" award from Global Banking & Finance Review for two consecutive years. The EDB's technical assistance policy will continue to contribute to the development of the Armenian stock market, and cooperation will not be limited to this program. Other development programs will be implemented with the support of the EDB in the near future.
