Business "transparent" funding and corporate bonds market: Part 1

YEREVAN, JUNE 16, ARMENPRESS. The bulk of entrepreneurial companies in Armenia has reached a level where alternative financing becomes a necessity. This is due to the objective fact that in major credit conditions, the amount of the mortgage required significantly increases, and to involve funds the companies are forced to use other tools of the financial market. In this case, the issue of corporate bonds, and later shares too, becomes predictable. In his interviewed to “Armenpress”, the CEO of "NASDAQ OEMX-Armenia" Konstantin Saroyan speaks about this issue and the upcoming developments.

- Armenia's financial problem still remains the fact that the economy prefers to take loans from banks rather than to enter the stock market. This gap between the economy and the stock exchange leads to the slowing of the growth. Then, how to secure the connection?

- Yes, objectively, we have created a situation where it is easier for the companies to take loans. But the problem will soon find its solution. To take 2-3 million dollar loan one needs nearly $ 5 million in real estate. The companies have reached a certain threshold of loan-mortgage and loan-capital ratio, when they have to think about finding alternative sources of financing.

- You mentioned about alternative financing. What is the possible alternative?

- In my view it will be corporate bonds, because it is more like a loan, and there is no psychological pressure so that the company loses some control levers. Later, when companies begin to issue bonds, shares will also be issued using the new financing mechanisms. I think that we will observe growth in the capital market and the corporate bond market in the near future.(THE FULL VERSION OF THE INTERVIEW IS AVAILABLE IN ARMENIAN)

Interview by Gohar Avetisyan