Local banks to render investment services
The first investment bank will be created in Azerbaijan, said Abid Mammadov, adding that the creation of an investment bank is one of the main goals of the AzFinance. The director of AzFinance investment company made the statement addressing the event titled “Capital Markets in 2018” on December 21.
The investment bank is a financial institution that organizes capital raising in the world, financial markets for governments and large companies, as well as provides consulting services for the purchase and sale of business, brokerage services.
“We plan to establish the country's first investment bank in 2018, or at the latest, in 2019,” Mammadov said. “The more we work with the market, the more often we see the demand in it. Investment bank will play a big role in this development.”
He added that people are gradually moving away from traditional financial instruments and are looking for new directions for investment.
“Until 2014, people considered two key tools for investment, namely, bank deposits and real estate investments. Today, people don’t want to use standard investments. The reason is that today the real estate market is no longer experiencing the boom that was observed a few years ago, and the interest on deposits is not so attractive,” Mammadov said.
Companies that are looking for alternative means of financing also show interest, therefore, the need for an investment bank is growing, according to him.
Vugar Namazov, head of the Baku Stock Exchange (BSE), in his turn stressed that listing in Azerbaijan should become more attractive.
He went on to say that it is stocks but not other tools that are a heart of today’s market, further adding that today, BSE offers great conditions for accepting companies for listing.
“In 2016 we updated the technical platform and created a trade system based on the system of Korean stock exchange. This system is among the top technologies in the world. We updated our legal framework. Now we have to revive business by using the platforms,” Namazov said.
Head of BSE pointed three directions that mainstreamed the current markets - control, competition and technology.
Namazov pointed out that the current listing process in BSE is split into three levels including major market, standard market and alternative market.
This approach attracts more companies to being listed, both major companies meeting top standards and small and middle businesses just emerging, he said.
“The future goal will be to have maximum possible number of companies listed. This year we have drawn two companies - Unibank and Metak to listing. Unibank is getting ready to issue bonds and stocks”, Namazov added.
Speaking at the event, Ruslan Babayev, Head of the Division of Supervision at Financial Markets Infrastructure at Azerbaijan’s Financial Market Supervisory Authority pointed out that, Azerbaijani banks will render investment services.
He said that the final decision on this issue will be adopted before the end of the first half of 2018.
“A package of proposals which envisage amendments to Azerbaijan’s legislation has already been prepared on this issue,” he noted. “The changes will reflect the issues of licensing and the types of services provided, as in the world practice banks cannot provide all types of investment services.”
Currently, 31 banks, including two state-owned ones, are implementing their activities in Azerbaijan.