ArmInfo.The acquisition of the Moscow Shopping Mall "Metropolis" by the Armenian company Balchug Capital for $700 million in 2023 has become one of the largest investments in the Eurasian region. This is stated in the latest report from the Eurasian Bank (EDB) "Monitoring of Mutual Investments of the EDB - 2024. Eurasian Region".
The report notes that it was thanks to this deal that Armenia has shown a significant growth in its mutual investment stock with a share of 1.8% in the Eurasian region. Its mutual FDI increased from $62 million in 2022 to $841 million by the end of the 1H 2024, an increase of more than 13.5 times or more than 80% of Armenia's total FDI stock the region. It is emphasized that this project has become the largest in terms of volume among new deals launched in the Eurasian region in the last two years. As noted in the report, the total mutual direct investment stock in Eurasian countries stood at $46.1 billion as at the end of the first half of 2024, down 1% from the 2023 level. This is the second decline in the region's FDI stock since 2018. This development is associated, according to the Bank's analysts, with the withdrawal of investors from a number of major projects, in particular, the withdrawal of Russian businesses from Polymetal's metal ore mining projects in Kazakhstan. In 2023, 31 new investment projects worth $2 billion were launched in the Eurasian region. Of these, the manufacturing sector accounts 16 projects. The increase in new projects is partly due to the delayed effect of investments previously planned for 2022. The number of new projects in the first half of 2024 indicates a potential decrease in 2024 compared to the previous year.
Private companies account for 68% of mutual FDI in the Eurasian region. The priority recipient of private investments is extractive industries (45%). Fully state-controlled companies accounted for 14.5% of mutual FDI. They have invested predominantly in the transport sector (42% of FDI). Azerbaijan is the leader in terms of the ratio of funds invested in the countries of the region to national GDP. The ratio stood at 6.6% of GDP as at the end of 1H 2024, up sharply from 4% of GDP in 2022.
Azerbaijan is ahead of Russia with 4.15% of GDP. The three main recipients of investment in the Eurasian region are Kazakhstan, Uzbekistan, and Azerbaijan, at $10.4 billion (22.6%), $10.2 billion (22.1%), and $5.8 billion (12.6%), respectively. Together, these three countries accounted for almost 60% of the total mutual FDI stock at the end of 1H 2024. Kazakhstan showed record 17% growth (relative to 2022) in mutual FDI inflows in 1H 2024, up to $10.4 billion. The number of active projects in Kazakhstan is 89 and the average investment per project is $96 million, slightly higher than the Eurasian region average ($90 million). Uzbekistan is the largest mutual investment destination outside the EAEU with more than 22% ($10.2 billion) of the total mutual FDI stock in the Eurasian region. This report continues the series of publications detailing the findings of a long-standing research project dedicated to monitoring mutual direct investments of the countries of the Eurasian region.The analysis relies on a database maintained by the EDB on the basis of diverse data obtained from publicly available sources.
It should be noted that Balchug Capital is an investment company headquartered in Yerevan. It was founded in 2010 by David Amaryan, who serves as CEO and oversees all investment activities. The company specializes in long/short event-driven and liquid strategies, as well as private equity.
