Thursday, September 13, 2007

Emerging market Armenia - quiet but successful story.

In last years Ukraine and Kazakhstan have caught fire and many investors have taken opportunity and multiplied invested money. But forgotten emerging market Armenia passed last 6 years with booming economy.

The European Bank of Reconstruction and Development estimates some 75% of economic activity occurring in the private sector. The same number as for EU newcomers Bulgaria and Poland, and well above the 65% figure for Ukraine.

Since 2000, GDP has more than tripled in dollar terms with average growth rate 11.5% The fastest growing sector is construction. Agriculture and export are stagnating.Armenia Stock Exchange in Yerevan is very shallow with total capitalization of $66m for traded companies. It contains potential especially in banking sector. Stock of private-sector bank credit to GDP is 8.7%, giving Armenia the lowest private-sector credit /GDP ratio of any country in Eastern Europe. Also due to government's plan to conduct a pension reform could support certain insurance and banking stocks.

Booming economy have impact on currency (Armenian Dram) appreciation which is strengthening against major currencies more than Central European currencies.Of course, investment to Armenia with any derivatives or investment certificates is high risky.


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