Investment companies call for improving government programmes of  capital market development in Armenia 

ArmInfo.A meeting with representatives of investment companies was held at the Ministry of  Economy of Armenia, who were received by Deputy Minister Lilia Sirakanyan. This was reported by the press service of the department.

The participants discussed the capital market development program,  current challenges and opportunities in the sector, steps taken to  ensure stability of the investment environment, easy access to the  market, the introduction of new tools and platforms, as well as to  improve the financial literacy of citizens and actively attract  investors.

In particular, the company representatives made their proposals to  improve the state support program for the issue of shares and bonds,  as well as the rating of companies, implemented by the Ministry of  Economy.

In the summer of 2023, the Ministry of Economy initiated, and the RA  government approved, a program of state support for the issue of  shares and bonds, as well as the rating of companies. As noted in the  draft decision, 10.65 billion drams will be required in the first  three years to implement the activities envisaged by the project. As  a result, in the next three years, according to experts, the volume  of new issues of securities may amount to 97.5 billion drams.

As part of the program, beneficiaries are provided with assistance in  issuing, placing and going through the listing procedure of bonds  issued after the entry into force of this decision, once for each  beneficiary, in the following amounts:

1) after the completion of the process of issuing, placing and  listing the bonds on the stock exchange, the beneficiary is provided  with a one-time assistance in the amount of 2% of the nominal value  of the placement, but not more than 30 million drams;

2) for the circulation of bonds, the assistance will be 3% of the  nominal volume of the placement for the first three years, but not  more than 45 million drams for every 12 months of circulation.

Thus, the maximum amount of state assistance under the First  Component will be 165 million drams. The subsidy will be provided for  the issue of bonds in Armenian drams, with a maturity of at least 36  months at the time of issue, which were placed through a public  offering, and after listing these bonds have a market maker.

The second component of the program concerns assistance in the issue  (through a public offering / IPO) and listing of shares. The state  reimburses up to 80% of the actual expenses incurred and confirmed by  relevant documents, but not more than 50 million drams (external  audit services, banking and stock exchange services).

The third form of support involves 50% reimbursement of expenses  (during the first year) for obtaining and maintaining a rating from  the American rating agencies Fitch, Standard and Poor's, Moody's or  the European Scope Ratings. In this case, the rating is subject to  compensation for at least two scales below the sovereign rating of  the state, and in the case of a public placement of bonds or shares  and listing on the Armenian Stock Exchange, within 18 months from the  date of receiving the rating - the beneficiary will also be  compensated for up to 80% of the costs for the first year (30% in  addition to the previous 50%)