Armenia's Economic Pulse

[Siamanto]

Re: Armenia's Economic Pulse

Armenia's Telecom Sector
Part II: Long Distance Communications

The monopoly of the "last mile" by Armentel is a handicap, what is the situation of long distance communications?

DECLINE IN PRICES OF DATA TRANSFER SERVICES IN ARMENIA POSSIBLE IN CASE OF OPERATION OF NEW FIBER OPTIC TRUNK

Noyan Tapan
Nov 20 2007

YEREVAN, NOVEMBER 20, NOYAN TAPAN. Data transfer from Armenia to
the outside world is currently done through the only fiber optic
trunk that passes through the territory of Georgia. Harald Grytten,
director general of the Armenian-Norwegian Armenian Datacom Company
(ADC, http://www.adc.am) told NT correspondent that the high prices of data
transfer services in Armenia are conditioned by this monopoly.

According to him, the data transfer traffic prices are very high in
Armenia as compared with international prices. He said that there
is a project to construct a new Europe-Caucasus-Asia fiber optic
trunk. In his words, it has not yet been decided whether the trunk
will pass through Armenia or not, but there is a hope that having a
new connection to international networks will help reduce the impact
of Georgia's monopoly.

http://mirror.nt.am/news.php?p=0&c=0&t=0&r=0&year=2007&month=11&day=20&shownews=106631&LangID=1#106631

Electronic Communications in Armenia

A relatively comprehensive document covering the regulations and structure of electronic communications in Armenia: http://ec.europa.eu/information_soci.../4_armenia.pdf

What is being/what can be done to correct the situation?

NEW PHONE SERVICE RULES TO BE CONSIDERED IN ARMENIA MAY 20

ARKA
May 14, 2008

YEREVAN, May 14. /ARKA/. RA Public Services Regulatory Commission
(PSRC) will consider the rules of providing and using telephone
services on March 20, said Gevorg Gevorgyan, Head of the Commission's
Telecommunications Department.

The rules have been developed with consideration of all the possible
problematic situations peculiar to Armenian market, Gevorgyan said. New
rules suggest that a telephone user have access to his current account
and pay his bills via the Internet. Besides, customers will be allowed
to sign an additional contract limiting their accounts.

"We have studied the international practices to the rules competent
enough to rule out any possibility for the users of paying for
calls they have not made or any other error of the billing system,"
Gevorgyan said.

Armen Poghosyan, President of the Consumers' Association of Armenia,
said the new rules should be adopted as soon as possible since
the current rules dating from 1999 do not meet the present-day
technological and legal requirements. Pogosyan said once the new
rules are adopted they will work to introduce an obligatory system
of signing individual contracts with each user.

However, Pogosyan said, some of the rules are alarming since they focus
on reducing the share of responsibility of provider and enhancing
the liabilities of customers. "Neither do the rules provide for any
compensation for system errors," Poghosyan stressed.

Once the new rules take effect, ArmenTel will be obliged to modify the
existing contracts with customers by July 1, 2009. Under the June 1,
2007 decision of PSRC, the approval of the new rules was prolonged
to December 30, 2007.

ArmenTel is the daughter company of VimpelCom (Beeline). The Russian
company acquired 100% shares in April 2007. ArmenTel provides
fixed-line telephone services to about 600,000 customers and mobile
services to over 450,000 customers.

http://www.arka.am/eng/transport/2008/05/14/9396.html

ALTERNATIVE TELECOMMUNICATION NET IN ARMENIA WILL HAVE LOW RETURN FOR GENERAL UNDERPOPULATION IN COUNTRY

arminfo
2008-05-13 18:51:00

ArmInfo. An alternative telecommunication network in Armenia will
have low return for the general underpopulation in the country,
ARMENIAN DATACOM COMPANY (ADC) General Director Harald Grytten says
in an interview with ArmInfo when commenting on the possibilities
of liquidating the natural infrastructure monopoly in the country's
telecommunication market. He believes that creation of an alternative
net is unprofitable. It is possible to return investments only in the
capital city, in regions it is impossible. As a result, the potential
field of activity will be sharply reduced, H. Grytten says. He is sure
that despite the alternative nets of optic and wireless technologies,
DSL communication has always been dominating, and the statistics of
European countries is an evidence of it. Cable net users exceed the DSL
user only in the USA due to the wide penetration of IP-television,
which is just being launched in Armenian, he says. As a result,
telecommunication net and the terms of access to it are becoming of
special importance. In this conditions, ADC Director General believes
that state regulatory agencies must elaborate stricter rules of
activity in the telecommunication market.

In such situation the company attaches a special importance to
negotiations and considers the readiness to conduct talks a good sign,
he says.

Speaking about the terms of using the net, suggested by ArmenTel,
ADC director says they cannot radically change the situation in
the telecommunication market. He also added that the problem of
subscriber's tariff differentiation known in Europe as Local Loop
Unbundling, (LLU), continues being one of the vexed problems at the
Armenian market. ArmenTel gave access to the DSL lines to the companies
interested but only subject to buying the "port", i.e. preserving
total control over the telecommunication net. But even such partial
introduction of LLU is a step forward by ArmenTel. Let's wait for
further developments, H.Grytten says.

To recall, in April of the current year ArmenTel
changed internet-communication tariffs for final users and
internet-providers. For this reason representatives of ArmenTel said
there was a chance of creation of alternative communication nets
by the interested companies if they are not pleased with ArmenTel
net services.

http://www.arminfo.info

[Siamanto]

Re: Armenia's Economic Pulse

Armenia's Telecom Sector
Part III: The Wireless Sector

Who are the players?

ARMENIA TO HAVE THIRD WIRELESS OPERATOR
By Ruben Meloyan

Radio Liberty, Czech Rep.
Dec 14 2007

The government has given the green light to the creation of Armenia's
third mobile phone network and will call an international tender for
that purpose next year, a senior official said on Friday.

Robert Nazarian, chairman of the Public Services Regulatory Commission
(PSRC), told reporters that the bidding for the wireless license will
start on May 1 and last for 90 days. He said it will be administered
by a special commission to be formed by the government.

With Nazarian giving no further details, it is not clear when the
government decided to further liberalize the Armenian market for
wireless services. Prime Minister Serzh Sarkisian's cabinet has
announced no such decision yet.

Nazarian's statement followed a newspaper report earlier this month
which said Armenia will soon have a third mobile operator. The
pro-opposition "Zhamanak Yerevan" claimed that it will be owned by
President Robert Kocharian's son Sedrak.

Mobile telephony remained underdeveloped in Armenia until the
government's decision in late 2004 to abolish a legal monopoly on the
service enjoyed by the ArmenTel national telecommunications company.

A Lebanese-owned company was hastily granted, without a tender,
the license to build the second wireless network. The launch of the
VivaCell network in summer 2005 led to an explosion in cellphone use
in the country.

VivaCell currently boasts over one million subscribers, or twice the
number of Armenians using the ArmenTel network. The two companies
are now owned by Russia's two largest mobile phone operators.

http://www.armtown.com/news/en/rfe/20071214/200712143/

TENDER TO CHOOSE THIRD MOBILE PHONE COMMUNICATION OPERATOR POSTPONED

Noyan Tapan

http://www.nt.am/news.php?shownews=113267

May 13, 2008

YEREVAN, MAY 13, NOYAN TAPAN. The rules of the tender to choose a
third mobile phone communication operator in Armenia have not been
approved yet.

The head of the telecommunication unit of the RA Public Services
Regulatory Commission Gevorg Gevorgian stated on May 13 that there
is a necessity to hold additional discussions on these rules, as a
result of which the tender has been postponed.

G. Gevorgian failed to say when exactly the tender will be announced
and which companies intend to participate in it. According to him,
information about the tender will be published by famous foreign mass
media, including the Financial Times.

What was the participation of the sector in Armenia's economy in Q1 2008?

K-TELECOM FIRST TAXPAYER IN ARMENIA FOR 2008

arminfo
2008-04-23 14:38:00

ArmInfo.

K-Telecom cellular operator (VivaCell trademark, subsidiary
of MTS) has become the first taxpayer in Armenia for first quarter
of 2008 by paying 6,813 billon drams taxes to the state budget, the
Revenue Service of Armenia (RSA) reports. RSA published the list of
300 biggest taxpayers for Jan-Mar 2008.

Armenian-Russian ArmRusgasprom CJSC ranks second in the list by 6,746
billion drams.

CJSC ArmenTel (subsidiary of VimpelCom) occupies the
third position in the list by 3.681 billion drams.

Zangezur Cooper and Molybdenum Plant CJSC paid 3 billion drams taxes and occurred
on the 4th position. The last in the top five taxpayers is Flash oil
trader by 2.4 billion drams.

CJSC Armenian Electric Networks is in the 7th position by 2.1 billion
drams.

Armenian Nuclear Power Plant is in the 13th position and Yerevan Brandy
Company is in the 15th position. Ararat Yerevan brandy- wine-vodka
plant is in the 42nd position in the list. RusAl Armenal is in the
61st position, Armenian Railway in the 70th position and HayPost
CJSC in the 129th position. The International Airports of Armenia,
the concessionaire of Yerevan Zvartnots Airport, proved the 142nd
yielding to many auto dealers of the country and even electronics
shops. Armavia CJSC national air carrier was not included in the list.

http://www.arminfo.info

Amentel dominates the Fixed Line Sector, who is K-Telecom that dominates the Wireless Sector?

MTS to Buy Control Of Armenia Provider (Russia)

September 17th, 2007 8:07 am

Mobile TeleSystems, the country’s largest mobile phone company, will spend up to 310 million euros ($430 million) to buy control of Armenian operator VivaCell, continuing expansion beyond the saturated Russian market, CEO Leonid Melamed said Friday.

Mobile TeleSystems, or MTS, bought 80 percent in the parent company of K-Telecom, which operates under the VivaCell brand. MTS paid $546 per subscriber, Melamed said in a conference call from Yerevan.

The price “implies high multiples with a market capitalization of $791 per subscriber,” Aton Capital Group said in a research note. “We believe the valuation is justified by high growth potential in Armenia,” where mobile phone penetration is 39 percent.

Russian mobile phone companies, led by MTS, had about 162 million users in Russia at the end of July, 20 million more than the country’s population, and are looking at other markets to sustain growth. MTS has more than 78 million subscribers in Russia, Ukraine, Uzbekistan, Turkmenistan and Belarus.

“This acquisition fully complies with our strategy to capture growth opportunities in the fast-growing CIS markets,” Melamed said, referring to the Commonwealth of Independent States, which includes 12 former Soviet republics. “We expect the company will show a double digit growth in the future.”

Aton estimates the deal will add from 2 percent to 3 percent to Mobile TeleSystems’ revenue and earnings before interest, taxes, depreciation and amortization next year.

Melamed said MTS would pay 50 million of the 310 million euros over the next three years if K-Telecom meets financial targets. He declined to be more specific.

K-Telecom was founded by the Fattouche family, a Lebanese investment group that retains 20 percent in the company and may sell it to MTS between 2010 and 2012, Melamed said.

K-Telecom has about a million subscribers and more than 66 percent of the mobile phone market in Armenia, a country of more than 3 million people.

Last year, the company reported sales of $104.1 million and operating income before depreciation and amortization at $57.8 million. OIBDA as a percentage of sales was 54.4 percent and the average monthly revenue per user was $15.60. It stood at $12 in the second quarter this year, Melamed said.

MTS will provide a 140 million euro technical loan to K-Telecom to pay off existing debt and help develop the company. MTS will make an announcement in the second quarter of next year if it decides to use the MTS brand instead of the VivaCell brand in Armenia.

Nikolai Pryanishnikov, executive vice president at VimpelCom, the country’s second-largest mobile phone company, told reporters Friday that his company was “calm” about the deal “because we are competitive with MTS.”

VimpelCom last year paid 341.9 million euros for Armentel, a fixed-line and mobile operator in Armenia.

“It will be even easier for us, as MTS is a traded company and is responsible for making financial results more transparent,” Pryanishnikov said.

http://wirelessfederation.com/news/category/k-telecom/

Services. A brief comparison of xG features.

VYMPELCOM RECEIVED FREQUENCIES FOR RENDERING 3G-SERVICES IN ARMENIA.

Analytical Information Agency
Oct 8 2007
Russia

The Joint-Stock Company "ArmenTel" (Armenia, 100 percent affiliated
company of the Open Society " Vympel-communications " (Vympelcom)
was received with the sanction of the Commission on regulation of
public services of Armenia on use of radio frequencies 1920-1935 MHz
and 2110-2125 MHz for rendering services of cellular communication
of the third generation (3G) in the territory of the country. It is
spoken about in the report of Vympelcom.

The decision on granting 3G-radio frequencies to ArmenTel was accepted
the Commission on regulation of public services of Armenia on October,
1st, 2007. For reception of the corresponding sanction the company
has directed the application on September, 25th.

We shall remind that ArmenTel owns License #60 giving to the company
the right to rendering 3G-services in the territory of Armenia.

The Joint-Stock Company "ArmenTel" renders services of fixed and
cellular telecommunication in standard GSM-900 and CDMA. The user's
base of the operator makes nearby 600 thousand users of the fixed
communication and 400 thousand cellular subscribers. Vympelcom owns
100% of shares of ArmenTel.

Vympelcom is the second-largest cellular operator in Russia and the
CIS, it - serves more then 56mln subscribers. Its largest shareholders
are Telenor (29.9% of voting shares) and the Alpha-groups (44%),
other shares are in the free reference at the New York share stock
exchange. The company has let out 51281022 ordinary and 6426600
preference shares, all preference shares belong to "Alpha".

The Net profit of Vympelcom on US GAAP in II quarter of 2007 has made
$359.273mln that is 84.3% above the parameter of the similar period
of the last year at $194.946mln. Proceeds have increased up 53.1%
to $1.717mlrd from $1.122mlrd. OIBDA parameter has grown up 59.7%
to $896.758mln from $561.555mln, OIBDA margin have increased up to
52.2% from 50.1%.

The Open Society "Vympelcom" borrows the 17 place in the "Leading
enterprises of Russia" rating on the results of 2005, presented by
the rating agency AK&M in September, 2006.

http://www.akm.ru/eng/

K-TELECOM FOLLOWS ARMENTEL INTO ARMENIA'S 3G SECTOR
by Michael Lacquiere

Global Insight
October 10, 2007

Armenia's leading mobile operator by subscriber numbers, K-Telecom, has
been awarded a 3G licence by the country's Public Services Regulatory
Comission (PCRC). The 10-year licence allows K-Telecom to offer 3G
services throughout the country.

Significance:Earlier this week a 3G licence was awarded to K-Telecom's
rival in the mobile market, VimpelCom-owned Armentel (seeArmenia:
9 October 2007. These developments will expand the sphere of
competition in the country's mobile sector, in which K-Telecom had a
two-thirds market share at the end of the first half of 2007, with
986,000 subscribers, while Armentel had the remaining third, with
471,000 subscribers. Following its purchase of K-Telecom last month,
Russia's Mobile TeleSystems (MTS) promised to deliver new, innovative
services and solutions, and the imminent arrival of 3G services
suggests that the battle in Armenia will extend beyond subscriber
numbers and into the sphere of value-added service uptake and revenue
generation. MTS's Acting Vice-President and Head of Business Unit MTS
Foreign Subsidiaries, Oleg Raspopov, noted in a press release that
the addition of 3G services to the company's Armenian portfolio would
"strengthen our leadership position", emphasising that the operator
had already gained experience in the sector through its 3G licences
in Russian and Uzbekistan.

http://www.globalinsight.com/

[Siamanto]

Re: Armenia's Economic Pulse

1 of 2
Armenia's Telecom Sector
Part IV: The Fixed-Line Sector

"THIS YEAR WAS SUCCESSFUL FOR ARMENTEL"

Mediamax Agency
Dec 11 2007
Armenia

Interview of the General Director of "ArmenTel" Company Oleg Bliznyuk
to Mediamax Agency and Banks.am portal


- "ArmenTel" Company ceased being a monopolist in the
telecommunications market of Armenia on October 1. What does this
mean for the Company and for the market as a whole? I remember you
said that "universal happiness will not start on October 1".
- Firstly, the decision on liberalization of the market only was
made on October 1 of 2007. The procedure itself is still subject to
discussion: corresponding political and economic levers have to be
elaborated yet.

As to my vision, the liberalization of the market does not mean that
if someone wants to provide services, he goes and receives a license
and starts providing those services at home or in the basement. In
practice, the very notion of "service" consists of many components,
starting from the quality and up to, for example, international
commitments in the sphere of internet and the international connection.

I am not at all against appearance of new providers, I am simply
against low-quality services. See, if people do not buy from us a
channel with the corresponding transmission line capacity, the final
quality of their services, naturally, will suffer, but the completely
unjustified references, according to which "ArmenTel" is the one to
be blamed, will continue appearing.

Another question appears as well: how are those companies going to pay
the taxes? Will the situation, which was in the past, remain, or will
everything become official? Various kinds of abuse are possible here.

So, indeed, "great happiness", of course, will not take place. I
believe that in the course of time, only a few companies will remain
in the market, which will really carry out transparent work and will
provide quality services.

I believe that it will become possible talking about real
liberalization of the market only in a few years. The regulator, to
give its due, has done volume work, but I still have the impression
that we are running ahead of the locomotive.

What concerns "ArmenTel", we, of course, know how we will act. We
will surely defend our economic interests, at that obeying the
Armenian laws.

Liberalization will not have negative influence on our customers.

Renouncement of monopoly did not cause our Company major
consequences. Yes, we can lose a part of our international and
inter-town traffic, but we are ready for that and we are ready to
compete. The most important is that the competition is fair and honest.



- Can we assume that the purchase of 80% of "VivaCell" shares by
MTS will make your competition more predictable and civilized, since
"VimpelCom" and MTS have been for a long time competing in Russia?
- I do not think that MTS will make any notable changes in the work of
"VivaCell" before the spring of 2008. MTS is a high-tech and advanced
company, and they will undoubtedly try to implement the culture of
high technologies in Armenia.

We know what to expect from MTS, we are competing in many markets,
and this competition is of civilized nature. We realize that there
will be no abrupt changes in Armenia, capable of collapsing the market
or harm any of the companies.



- More than a year has passed from the moment of acquisition of
"ArmenTel" by "VimpelCom" Company. What achievements have been made
in the course of this year, and what, on the contrary, you did not
manage to do?
- First of all, we realized then that much time and many efforts would
be needed to understand what was going on in the company, since a
certain part of information at the moment of purchase was unavailable
for us. In the course of a year, we had to pay much attention to the
organizational issues. Let's say, we planned to prepare a basis this
year for advancing in future - to settle the things with billing,
the fixed connection, construction of new basic stations.

A very important fact is to settle the matters with the people, who
work here, to solve the issue of social guarantees of the employees.

Professional examination of employees has never been realized here.

Of course, it took us much time to understand everything and to
establish order.

It took certain amount of time for the implementation of special
procedures in "ArmenTel", which existed in "VimpelCom" and which
correspond to the international accounting standards. Of course,
it is difficult working with old procedures and simultaneously
implementing the new ones. The shift of the billing system was
accompanied with technical costs, which are inevitable in such cases,
since we implemented a completely new version, which is not used even
in Russia yet.

Having analyzed the existing equipment of the mobile connection, we
realized that we could not work with it. Despite the fact that the
equipment was relatively new, it did not support many new functions,
necessary, in particular, for the implementation of 3G. As a result,
there was a decision made on changing the whole equipment, and this,
of course, took us much time.

I consider this year a successful one for the Company, since we put
an important start for the future, carried out huge amount of rough
work, which is not visible beyond the borders of the Company.



- Will the technical modernization that you mentioned lead to the
extension of the coverage zone of "ArmenTel" mobile network?
- By the end of 2007 376 basic stations will function in the
"ArmenTel"'s network. As a result, even today we have almost reached
parity with the competitor, concerning the coverage part. When we
purchased the company, the coverage made 65% of the populated territory
of Armenia. Today the mobile network of "ArmenTel" covers over 90% of
the populated territory of the country. We continue installing basic
equipment and we intend to conclude the work, planned for this year,
by mid-December.



- So, you consider that the correlation, which exists today in the
mobile connection market of Armenia - 65% of "VivaCell" subscribers
and 35% of "ArmenTel"- will still change?
- Of course, the picture will change and we work for that. We are
not going to accept the situation, when "VivaCell" became the leader
of the market in the course of two years. We use the potential,
the knowledge and the financial opportunities of "VimpelCom" Group
to change the situation.

You know, it is possible to build a wonderful network, but if no one
knows about it, the old stereotypes will function. Unfortunately,
those stereotypes still exist, although "ArmenTel" is the national
property of Armenia irrespective of who the owner of the Company is.

We stand face to face with our subscribers and we worry very much,
when we are informed that someone was rude with the customer in the
service office. We have even launched a "helpline" for the people to
inform us timely on violation of their rights. I assure that if you
call this number and say the name of the employee of "ArmenTel", who
was rude and unjust to you, and the results of the check prove that,
we will say good-bye to such an employee.

We have set for ourselves the task to become the best service
company in Armenia. We have all the necessary components for that -
the experience of "VimpelCom", technical opportunities, good people,
who want to work and who think about the Company.



- Lately, the leaders of Armenian companies, irrespective of their
sphere of work, in increasing frequency raise the problem of lack of
qualified personnel. Does "ArmenTel" come across this problem? If we
talk about the high and middle level managers, is it better to train
them within the company or invite from abroad?
- The problem of invited specialists is not that acute for purchased
companies. I believe that the invited managers are necessary for the
first 2-3 years to implement certain business-processes and implant
corporate culture. But for the most part, the personnel should be
the local one - Armenians should work in an Armenian company.

There is the problem of shift of generations. We have a project
called "HR Reserve" in "VimpelCom", the essence of which is that each
top-manager brings up people to a certain degree, since those people,
sooner or later, will come to substitute him. We will implement this
scheme in "ArmenTel" as well.



- In summer of 2007, you put into commercial exploitation the service
of broadband internet with the use of ADSL technology. How demanded it
proved itself and can we assume that in the course of time "ArmenTel"
will develop this type of services under an independent brand?
- There is a specail group established in the Company, which works to
develop this direction. It is yet quite cumbersome for the subscriber
to connect to this service and we strive to facilitate the process as
much as possible. I believe that in the beginning of 2008, serious
changes will take place, which will concern both the prices and the
types of the services provided.



- Returning to the issue of stereotypes, certain part of the society
has negative emotions for the very name of "ArmenTel", which is
conditioned by the "Greek past" of the Company. On the other hand,
you repeatedly stated that you do not consider the change of the
brand justified before securing high quality of services. How can
this dilemma be solved?
- My personal attitude towards "ArmenTel" brand is very positive. It
is another question that very serious mistakes were made in the past.

I believe that we will not renounce the "ArmenTel" brand concerning
the fixed connection.

What concerns the court examination with the Armenian "Bi Line"
Company, I think that soon this contingency will be solved and we will
have an opportunity to present mobile connection services under our
brand in Armenia. But my strict stance is that we should fundamentally
improve the service, the quality of services and the attitude towards
the subscribers before that. We do not want to position the existing
negative attitude to the new brand.

http://www.gab-ibn.com/IMG/pdf/Ar22-_This_Year_Was_Successful_For_ArmenTel_.pdf

.....

GROWTH OF NET INCOME OF "ARMENTEL" EXCEEDED 300%

Mediamax Agency
Nov 30 2007
Armenia

Yerevan, November 30 /Mediamax/. The revenues of "ArmenTel" Company
in the third quarter of 2007 made $ 63mln 277 thousands, $25mln 723
thousands of which fell on the share of the mobile connection, and
$37mln 554 thousands - on the share of the fixed connection.

Mediamax reports that the report, following the results of the
financial and operations activity of "VimpelCom" in the third quarter
of 2007, reads this.

The revenues growth of "ArmenTel", as compared to the second quarter,
made 8.4%.

The OIBDA index (Operating Income before Depreciation and
Amortization) of "ArmenTel" in the third quarter of 2007 made $32mln
888 thousands. The growth of OIBDA, as compared to the second quarter,
made 9.4%.

The net income of "ArmenTel" in the third quarter made $15mln 961
thousands. In the second quarter the given index stood at $3mln 963
thousands. The growth of the net income made 302.8%.

The number of active subscribers of the mobile network of "ArmenTel"
in the third quarter of 2007 made 446 957. The number of active
subscribers reduced by 5.1%, as compared to the second quarter,
when the Company had 471 000 active subscribers.

The share of "ArmenTel" in the mobile connection market of Armenia
stood at 33.6% in the third quarter.

"The main problem area, which causes our concern, is the share
of market of subscribers in the mobile market of Armenia. We have
already taken up a number of measures, directed to strengthening our
competitive positions. And although there are already the first signs
of positive influence of those measures, it will take us some time
to fully use the effect of the realized measures", the report reads.

The average revenue per user (ARPU) of the mobile network of "ArmenTel"
Company made $17.6 in the third quarter, having increased as compared
to the second quarter for 1.7%.

The average revenue per user (ARPU) of the fixed network of "ArmenTel"
Company made $20.4 in the third quarter of 2007, having increased
for 5.7% as compared to the second quarter.

The number of "ArmenTel" fixed connection subscribers in the third
quarter made 616 175, having increased as compared to the second
quarter for 1.0%.

http://www.mediamax.am/main_e.htm

[Siamanto]

Re: Armenia's Economic Pulse

2 of 2

Armenia's Telecom Sector
Part IV: The Fixed-Line Sector

Vimpelcom to operate in Armenia with beeline brand

YEREVAN, March 7. /ARKA/. The principal task of the VimpelCom public
corporation in Armenia is rebranding and ArmenTel Company's operation
in conformity with the universal standards of the group of companies.

`We are sure that we have the full right to operate with our brand in
Armenia and we are happy that we have legal grounds to connect the
country to the BeeLine area,' stated Executive Vice-President for
Business Development in the CIS Dmitry Pleskonos.

The company had this opportunity after February 25, when the RA
Intellectual Property Agency decided to register a license agreement
between VimpelCom and ArmenTel (the latter being the VimpelCom's
daughter company in Armenia) on the transfer of right to the use of the
Beeline brand.

The Agency also registered the slogan `Live on the bright side!' to be
used in Armenia. It means that from this date ArmenTel can use the
brand on a legal ground.

This January the RA Court of Cassation confirmed the application of
international registration of the Beeline brand to communication
services in Armenia. Immediately after the verdict was returned,
VimpelCom initiated a procedure of registration of the transfer of
right to the use of its brand to the ArmenTel Company in Armenia.

Under the license agreement, ArmenTel is to pay to the parent company
100,000 RUR as one-time consideration for a license for the use of
brands in Armenia during the entire period the registration of the
brands is in effect.

VimpelCom's promotion plans for the Beeline brand in Armenia were
hindered by a conflict with an Armenian company specializing in
software development, assembly and sale of computer. The company's
brand Bi Line sounds similar to Beeline (in Armenia and Russian).

The management of the Russian company considers the situation
artificially complicated ` ArmenTel has no intention to sell computers,
and Bi Line does not plan to enter the telecommunications market.
The RA Administrative Court is currently considering a claim lodged by
the Armenian Bi Line IT-company against the Intellectual Property
Agency. The claimant demands the invalidation of the Agency's decision
on the abeyance of the Bi Line brand.

ArmenTel holds a monopoly of stationary telephone communication in
Armenia. The company is also one of the mobile communication operators
in Armenia. In April 2007, VimpelCom (Russia) became full owner of
ArmenTel.

The Vimpel Com Group comprises communication operators from Russia,
Kazakhstan, Ukraine, Tajikistan, Uzbekistan, Georgia and Armenia.
VimpelCom's licenses for GSM and 3G communication services are in
effect in a territory with an approximate population of 250mln people.

VimpelCom was the first Russian company listed on the New York Stock
Exchange, its shares being symbolized as VIP. `0--

http://www.arka.am/eng/transport/2008/03/07/8438.html

'ARMENTEL' INVESTED ABOUT $63 MLN IN UPGRADING IN 2007

armnifo
2007-11-16 14:47:00

ArmInfo. "ArmenTel" CJSC invested about $63 mln in the Company's
upgrading from early 2007 to the midst of November, Director General of
"ArmenTel" Oleg Blizniuk told journalists today.

He said that the investments were attracted mainly to upgrading of
the network, implementation of a new billing center and development
of information technologies. The director general said that the
Company will master $90 mln of investments till the end, 2007. He
called the current year difficult for "ArmenTel" as "it underwent
many changes and alterations". The plan of investments for 2008 is
worked out taking into account the subscribers' needs and now it
is specified, O. Blizniuk said. He added that "ArmenTel" intends to
develop both the cell network and the fixed one in 2008. The Company
will complete digitization of ATS in Yerevan in the near future. At
late, 2008, it may pass to the new plan of numeration and implement
seven-digit telephone numbers in Yerevan and six-digit ones in the
regions instead of the present six-digit and five-digit numbers,
respectively. "ArmenTel" intends to change the numeration plan only
if demand is available in the market.

Oleg Blizniuk also commented on the information in the Armenian press
saying that "ArmenTel" dismisses its employees in order to sale the
fixed business.

O. Blizniuk called it a "real raving". He explained that "ArmenTel" had
never followed the requirements of RA Labour Legislation before. "We
have to follow these requirements. It became clear during the
professional inspections that many employees cannot take stay at the
positions they take for a number of professional diseases. Dismissals
and transfer of the people to another job give us no pleasure as
we loose professional staff as a result of it, the people , who had
worked in the Company for 20-30 years", O. Blizniuk said.

To recall, 100% of shares of "ArmenTel" CJSC belong to the "Vimpelcom"
Ltd.

http://www.arminfo.info

[Siamanto]

Re: Armenia's Economic Pulse

Armenia's Financial System
Part I - Armenia's Financial Aspirations

AZG Armenian Daily #101, 28/05/2008

Financial

FIRST FINANCIAL AND BANKING CONFERENCE IN ARMENIA

Union of Armenian Banks held its first financial and
banking conference in the hall of `Mountainous
Armenia" vacation home in Dilijan (Armenia).

RA President, Prime Minister, Chairman of Central Bank
and heads of organizations of financial and banking
system participated in the conference.

The aim of the conference was to clarify the basic
directions of future development of the financial and
banking system in Armenia, also the role of the system
in the approaches and programs of RA general
development.

President Serge Sargsian mentioned in his speech that
the financial system of Armenia has a real potential
to become a financial center in the region.

"We'll bring experience, modern methods and form
stable traditions of activities in financial markets.
In this sense entrance of the Stockholm Exchange to
Armenia I qualify positively and we should continue
taking of similar influential steps.

Serge Sargsian highlighted the progress of the
financial and banking system and mentioned that it can
serve as a locomotive for all the branches of the
economy and for the solution to the problems of the
population. According to the President, one of the
important sides of the financial and banking system
are the economic processes and introduction of a
culture based on confidence in public relations

The Armenian financial sphere has also another issue
in its way of development; the factor of proportionate
development. According to the President, it is
impossible to get serious results if the economic
development is not felt by each citizen.

Prime Minister Tigran Sargsian touched upon the issue
how to become a financial center. According to him,
the works should be carried out in 6 directions.
These, in their turn, will reveal the relative
superiorities of Armenia. The international experience
dictates where those superiorities are.

The PM mentioned that several advantages are available
in Armenia compared with the regional countries.
First, comparatively inexpensive manpower that is
fluent in Russian, English, etc. Second, the payment
and accounts system functioning in real period of
time, and third, the readiness to become a financial
center that assumes political will to carry out
necessary amendments and form corresponding
legislation.

During the conference a film was shown dedicated to
the analysis of the financial centers' international
experience, and then took place the presentation of
the "Code of rules of banking business ethic" worked
out by the Union of Armenian Banks.

After the conference RA President, Prime Minister and
Deputy Chairman of the Central Bank visited the new
building of the educational center of the Armenian
Stock Exchange and Central Bank.

By Nairi Muradian, translated by L.H.

http://www.azg.am/EN/2008052802

Mediamax, Armenia
May 27 2008


Armenia Moving Toward Becoming Financial Powerhouse

The idea of turning Armenia into a financial and banking center
should be our guide for the nearest years, President Serzh Sarkisian
stated today.

Mediamax reports that Serzh Sarkisian said this during the first
financial-banking conference, organized by the Union of Banks of
Armenia (UBA), which took place in Dilijan today.

`From now on, we should not compare the development speeds of the
Armenian financial system to the indices of the countries of the
region, but should find out to what extend we approached the world
trends', the President noted.

Serzh Sarkisian stressed the importance of OMX Group's presence in the
republic, noting that this brand-named exchange operator will help the
formation of a competitive financial market in Armenia, meeting the
international standards.

According to the President, the banking system should become a
locomotive of Armenia's economy.

Serzh Sarkisian highlighted the necessity to establish trust relations
in the financial sphere.

`Trust relations should be spread in all the spheres of business. Time
will come and the factor of trust will be stronger than the factor of
legal norms in the relations between sides', the President stated.

He also stressed the importance of even territorial development in
Armenia, noting that the citizens of the country should feel economic
growth on themselves.

`We will take up all the necessary legislative and political measures
to reach the goals set', Serzh Sarkisian stated, adding that the
authorities are ready to consider proposals from participants of the
financial market.

http://www.galiq.com/124/armenia-moving-toward-becoming-financial-powerhouse/

Opinion of the Prime Minister, former Central Bank of Armenia Chairma

Arab States May Move Financial Center To Armenia From Lebanon
Huliq.com
May 26, 2008

The Prime Minister of Armenia Tigran Sargsyan says that Arab states
express a wish to move their financial and banking center from Lebanon
to Armenia as Armenia makes serious steps to become the regional
financial center by dedicating northern town of Dilijan specially for
this purpose.

Yerevan /Mediamax/. Arab states express a wish to move their financial
center from Lebanon to Armenia, proposing to carry out the
corresponding legislative changes in the republic.
Mediamax reports that the Prime Minister of Armenia Tigran Sarkisian
said this today, speaking in Dilijan at the first financial-banking
conference, organized by the Union of Banks of Armenia (UBA).
`Armenia can become a bridge between Europe and Moslem states', Tigran
Sarkisian stated, adding that to turn into a financial center for the
Arab world, Armenia should gain the outline of an off-shore zone, which
will present profitable financial services according to world
standards.
The Prime Minister also noted that Armenia can organize trading of
securities of CIS states.
`Along with the development of securities markets of CIS states, there
is yet the problem of securities' entry to foreign markets unsolved,
and Armenia can propose CIS auspicious conditions to place their
securities.
OMX Group operator, which has entered the Armenian market, may realize
crucial programs', Tigran Sarkisian stated.
Head of the government also noted the importance of establishing in
Armenia investment funds and systems of assets management. According
to Tigran Sarkisian, the Armenian population has about $2bln cash on
hand and the presence of investment funds will allow placing those
assets. He added that the transition to accumulative pension system
will contribute to the formation of share investment funds and a
system of assets management.
`The insurance market and the market of securities of Armenia fall
behind in development from the banking system, and active reforms are
necessary in these spheres. The main resource of the financial sphere
is intellect, consequently, special attention should be paid to
financial education', Tigran Sarkisian stated.

http://www.huliq.com/60384/arab-states-may-move-financial-center-armenia-lebanon

The Appointment of the Minister of Finance

TIGRAN SARGSIAN: ONE OF GOVERNMENT'S PURPOSES IS TO MAKE ARMENIA A FINANCIAL CENTER

Noyan Tapan
April 22, 2008

YEREVAN, APRIL 22, NOYAN TAPAN. One of the important purposes of the
government is to make Armenia a financial center, the prime minister
Tigran Sargsian stated when introducing the newly appointed minister
Tigran Davtian to the staff of the ministry of finance. The prime
minister said that T. Davtian is known among economists as an
experienced specialist who is well-familiar with the economic problems
of the country, also as a decent, educated and honest person with a
rich biography.

The former minister of finance Vardan Khachatrian said that he assumed
this post in 2000 in hard conditions when the state budget's current
deficit amounted to 63 bln drams (about 203.2 mln USD at the current
exchange rate), while economic growth made 4.2%. In his words, by
common efforts they managed to get out of this situation and enter
a period of sustainable development. V. Khachatrian expressed an
opinion that an electronic procurement system should be introduced so
that in 2010 it will be possible to transfer to a programmed system
of budgeting.

http://www.nt.am/news.php?p=0&c=0&t=0&r=0&year=2008&month=04&day=22&shownews=112563&LangID=1#112563

Some Reactions/Opinions

ARMENIAN BANKERS BACK IDEA OF TRASNFORMING ARMENIA INTO FINANCIAL CENTRE

ARKA
May 26, 2008

YEREVAN, May 26. /ARKA/. Armenian bankers totally agree with the
president's idea of transforming Armenia into a financial centre.

President Serge Sargsyan, Prime Minister Tigran Sargsyan, Central Bank
managers and key players in the financial and economic system were
attending the conference to discuss the ways of achieving this goal,
as well as Armenia's advantages in the sphere.

Ardshininvestbank CEO Aram Andreasyan said it will take much time and
effort to achieve this goal. "Adopting the practice of other countries
currently viewed as financial centres will strongly stimulate Armenia's
economy in general," Andreasyan said.

CEO of the Conversebank closed joint-stock company Ararat Ghoukassyan
said four of the 35 financial centres existing in the world are
global and one is a specialized one. Armenia is planning to become
a specialized financial centre.

He also said the premier's idea to create a Global Development Bank
is quite interesting. "The financial system of Armenia should expand
its functions since our practice is not quite enough to provide modern
investment and banking services," Ghoukassyan said expressing optimism
that Armenia will succeed in achieving this.

Executive director of Biblos Bank Armenia Vahagn Amirganyan closed
joint-stock company said formation of a financial centre should follow
the formation of a business environment. "To raise the attractiveness
of the country's business environment we need to handle a number of
problems, namely, to apply international accounting standards, so
that they are easily understood by foreign investors. " he said.

http://www.arka.am/eng/finance/2008/05/26/9555.html

CAN ARMENIA BECOME A FINANCIAL CENTER?
Vasak Tarposhyan

Hayots Ashkhar Daily
Published on May 27, 2008
Armenia

"Armenia has real potential to become a financial center in the region.

I strongly believe in this prospect and I'm sure this idea must become
the guideline of our work in the coming years," the president announced
during the first financial banking conference hold in Dilijan.

Though the idea to become a financial center in the region is far
not new, such high level announcement has been made for the first
time. The important thing is that practical steps are already being
made in this direction and the construction of the Funding Exchange
and Central Bank Study Center in Dilijan testifies to this fact.

Thus in essence not only the base of the formation of the regional
financial-study center is laid, but also the first steps are taken
for the country's proportional development. It is not a secret that
the economy is strictly centralized in Yerevan.

To become a financial center, Armenia really has a dynamically
developed and a stable banking system. A productive legislative
field is formed for the banking activity, which has created favorable
conditions for the flow of the foreign investments in our country. The
positive developments in this direction are evident. Especially during
the recent one-two years a serious interest of foreign capital towards
Armenian is really noticeable. Whereas not only the capital of the
existing banks is completed by the foreign financial means but there
is also a requirement to open new banks.

The factor of the Diaspora is a very good advantage for Armenia to
become a financial center. To make this advantage practical the idea
of establishing a pan-Armenian bank has been proposed, which needs
to be discussed.

Prime Minister Tigran Sargsyan says the existence of the professional
potential is also a great advantage for Armenia to become a financial
center. And, the most important thing is that the readiness to become
such a center is the basis of the political will to make necessary
reforms.

Of course we can't say that all the conditions exist in Armenia,
in order to become a financial center. There are lot's of problems
that we must solve. The most important problem here is the one linked
with the currency market. The steps taken in this sphere during the
recent years didn't give any positive results; the currency market is
not completely accomplished. But the steps taken in this direction
inspire hope that the situation will change very swiftly. Last year
a famous intentional company managed Armenia's funding exchange. The
entrance of Stockholm exchange can finally promote the accomplishment
of the currency market in Armenia.

The next obstacle is linked with the accumulated pensions and
investment funds, which are not formulated in Armenia.

It is worth mentioning that Georgia also pretends to become financial
center of the region. Of course Armenia's banking system is one
step forward from the Georgian, but during the recent years serious
reforms are being made in Georgia's banking system, which can change
the situation.

But Armenia must do its best to achieve its goal otherwise tomorrow
it will be very late.

http://www.armtown.com/news/en/has/20080527/258583277/

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Related Threads
Armenia: banking hub

[Siamanto]

Re: Armenia's Economic Pulse

Armenia's Financial System
Part II - As Perceived By International Institutions

Mediamax Agency, Armenia
Feb. 25, 2008

Armenian banks are well capitalized and profitable, but the financial
sector lacks diversification, the EBRD report reads

Yerevan, February 25 /Mediamax/. The banking sector of Armenia is
fully privatized and has undergone primary consolidation, which was
followed by increase in mid-2005 of the requirements as to the
sufficiency of the capital'.

Mediamax reports that this is stated in the report of the European
Bank for Reconstruction and Development (EBRD) on the process of
transition for 2007.

`In January of 2006, consolidation of the banking and non-banking
control within the framework of the Central Bank of Armenia took
place, and today such control covers 400 insurance companies, credit
organizations, broker companies and exchange points.

This assisted the increase of prudential standards for non-banking
financial mediators and led to revocation of a few licenses. In 2006,
a system of insurance of deposits was implemented, and the banks
passed on to the International standards of financial accounting.

On the whole, the banks are well capitalized, are liquid and
profitable, and the quality of credit portfolios remains relatively
high. At the same time, the financial sector lacks diversification,
and the non-banking financial sector remains small.

The growth speeds for private crediting increased, especially
concerning consumer and mortgage credits, however, the total share of
the credit activity in the economy still makes less than 10% from the
GDP', the report notes.

http://www.gab-ibn.com/IMG/pdf/Ar10-_Armenian_banks_are_well_capitalized_and_profitable.pdf

http://www.ebrd.com/pubs/factsh/country/armenia.pdf

Forbes, NY
Dec 26 2007


Armenian banks' credit outlook stable - Moody's
12.26.07, 12:20 AM ET



MUMBAI (Thomson Financial) - Moody's Investors Service the credit
outlook for rated Armenian banks is stable, reflecting an evolving
regulatory framework, buoyant credit growth, low banking penetration,
robust aggregate capitalisation and good asset quality.

In its new banking system outlook for the country, the ratings agency
said these strengths are offset by the challenging operating
environment, potential for accelerated asset quality deterioration
due to the unseasoned nature of loan portfolios, and real concerns
regarding operating risk due to under-developed infrastructure.

Moody's (nyse: MCO - news - people ) said the Armenian banking sector
has undergone considerable consolidation in the past decade after the
banking sector turmoil of the mid-1990s and subsequent tightening of
prudential regulations.

Moody's said it notes that the system, comprising twenty-one banks,
remains highly fragmented, however, the four largest banks control
45.54 pct of total banking system assets and the ten largest banks
79.61 pct.

The ratings agency said the Armenian banking sector lacks economies
of scale in its current structure, resulting in low productivity and
thereby raising the potential for further market consolidation.

Moody's said it notes that Armenia's regulation is improving from a
historically low base, and could benefit from further refinement and
better infrastructure and risk controls.

Moody's said it maintains a generally positive view regarding banks'
efforts to expand their retail and mortgage lending operations,
although the rating agency emphasises that fast credit expansion
could result in elevated non-performing loans (NPLs) for the system
in an economic downturn, particularly as loan portfolios are not
seasoned.

As the country's nascent banking sector evolves and the sector's loan
book term structure lengthens, Moody's said it expects NPLs to grow
to levels observed in other countries at similar stages of
development.

The weight of foreign-currency loans as a proportion of total loans
has decreased significantly in recent years, from a high of 78 pct of
total loans in 2002 to around 42 pct towards the end of 2007.

'If the weight of foreign currency-denominated loans continues to
contract at current rates, our concerns are likely to be alleviated,'
Fimi Gostanian, a Moody's senior associate said.

http://groong.usc.edu/news/msg215712.html

ARMENIA'S BANKERS ARE AMBIGUOUS IN NECESSITY OF SECURITIZATION OF ASSETS

arminfo
2008-05-22 01:13:00

ArmInfo. Armenia's bankers are ambiguous in necessity of securitization
of assets, the results of voting of May 21 "English Debates" in
"Marriott Armenia" Hotel, organized by an independent rating agency,
member of the international Global Rating Group, certify. The debates,
with participation of over 30 representatives of commercial banks,
heads of credit companies, investment companies and experts, were
dedicated to the topic 'Securitization as a Required Tool for
Increasing Liquidity of Banking Assets. Is that Right?'.

The event was held under support of the Union of Banks of Armenia,
USAID and East West Management Institute within the frames of the
Partners for Financial Stability programme.

Member of the Central Bank Board Karine Minasyan said in her speech
that CB is currently working over implementation of new alternative
tools for regulation of the processes of securitization of banking
assets.

The first tool is a possibility of issuing mortgage bonds by banks
and credit organizations. Moreover, free issues will be carried
out under tight control of a megaregulator. "We envisaged numerous
regulatory mechanisms to assure high reliability of these securities
and confidence of investors", she said. The second tool will be a
"pure" form of securitization, which envisages real sale of assets to
a specially created legal person. "The draft laws we intend to shortly
introduce, envisage a possible alternative, due to which any market
participant will be able to realize different initiatives in the area
of securitization", K. Minasyan said. Along with it, member of CB Board
presented the advantages the market participants will receive using
the tools of securitization of assets. "In particular, this will allow
the companies to extend their business, receive an additional income,
manage the credit risks more efficiently and release the resources",
K. Minasyan said.

For his part, co-Director of AEPLAC Tigran Jrbashyan said that
securitization in Armenia is not a new phenomenon. 'In a period of
privatization in Armenia in 1993-94, when the major part of the state
property was transformed into a form of unclear joint- stock companies,
an elementary securitization of state assets was also observed, a so
called voucherization', T. Jrbashyan said and added that a postulate on
non-readiness of Armenia for securitization may be ruled out. 'provide
the market with a tool and, believe, the Armenians will make a profit
of it', he said part in play. In addition, he said, not only mortgage
loans but consumer credits as well may be subject to securitization
of assets in Armenia. Along with it, T. Jrbashyan emphasized that
implementation of international standards during securitization is
an important moment for attraction of funds.

T. Jrbashyan expressed confidence that a boom around the banking
assets shows that there are banks in the country with enough capital
for investment in securities. 'They need a relevant tool. However,
a certain liquidity problem exists in the banking system, especially
in the actively working banks. Despite the fact that the Armenian
market is not integrated enough in the world one, the volume of
available resources reduced, and this problem will intensify', AEPLAC
co-director said.

Director of the 'Capital Assets Management' Investment Company Tigran
Karapetyan, holding to the opinion of international experts, said
that the minimum volume for profitable and efficient securitization
should exceed $250 mln. T. Karapetyan thinks that securitization of
assets in Armenia may be efficiently carried out only in case of a
cumulative credit portfolio of the Armenian banks, totaling about
$1.5 billion. 'Only in this case, securitization will be profitable,
however, unification of the banks in one pool is not real', he
emphasized. T. Karapetyan divided the risks during securitization into
two types: the market and legal risks. Talking about the first one,
he said that the property is a pledge of the credit portfolio of the
banks being an object of securitization. Based on this, he said, the
size and quality of credit portfolios largely depend on the state of
the real estate market being in a state of overheating. As for the
legal risk, T. Karapetyan expressed an opinion that not the whole
legislation covers the available legal risks today. Along with it, he
shared the viewpoint that securitization will be impossible without
the relevant international standards, as assessment of assets and
the property is connected just with them.

T. Karapetyan thinks that not all the banks of the country need
securitization today. 'The current liquidity ratio of the Armenian
banks exceeds the required CB standards one and a half times. In
any case, if the bankers think about increase of liquidity of their
assets, securitization will not become a task of prime importance
for them. An international institutional investor is necessary for
the first successful securitization in Armenia. However, under the
present crisis in the international market, I do not think that its
attraction in a short-term prospect is real', he said.

Deputy Chairman of the Board of 'Converse Bank' Tigran Davtyan,
who also marked a non-topical nature of securitization of assets
in Armenia, substantiated his position by the fact that even simple
bonds in the country are presently sold with difficulty. 'Currently,
the local banks experience a problem of liquidity, and a deficit
of available long-term resources is the greatest problem for
them. Therefore, the market today is not ready for securitization',
T. Davtyan emphasized.

To note, the independent Rating Agency AmRating, being part of the
GlobalRating Rating group, which also includes RusRating (Russia)
and KzRating (Kazakhstan) agencies, is the organizer of the English
debates. The Agency's main activity is conferment of credit ratings
to the banks, as well as their debt instruments, compilation of
analytical reviews about different signets of the financial market.

http://www.arminfo.info

"KAMURJ 2008" 5th INTERNATIONAL ECONOMIC FORUM OPENS IN TSAKHKADZOR

YEREVAN, FEBRUARY 17, NOYAN TAPAN. The 5th international economic forum
"Kamurj 2008" ("Bridge 2008") with the participation of about 300
participants from seven countries opened in Tsakhkadzor on February 16.

The plenary sitting of the forum was dedicated to the subject
"International Economic Cooperation. Priorities, Trends, Dominating
Power". Prior to giving a report on prospects of Armenia's economic
development, the RA minister of trade and economic development Nerses
Yeritsian proposed that "Kamurj 2009" be dedicated to issues of
increasing the competitiveness of our country in the world economy. In
his words, the forum is organized at a high level, due to which
"Kamurj" is associated with world econimic forums held in Davos
(Switzerland). Speeches were made by Sergei Petrov, deputy governor of
Stara Zagora region (Bulgaria), Yan Visner, chairman of the Union of
Czech and Moravian Production Cooperatives (UCMPC), Vladislav Ashmarin,
head of the innovation activity department of the Moscow government,
Anahit Simonian, head of the United Nations Industrial Development
Organization (UNIDO) programs in Armenia, and Nikolay Murashov, head of
the department of industry (Kaliningrad region) of the RF ministry of
economy. The speakers presented the structures headed by them and
addressed the opportunities of cooperation with them.

At the conclusion of the plenary sitting, the chairman of the Union of
Manufacturers and Businessmen (Employers) of Armenia (UMBA) Arsen
Ghazarian handed a gold medal of the union to Norayr Nazinian, director
of "Master" internation integration assistance center, an organizer of
"Kamurj," for the center's contribution to development of economic
links between Armenia and foreign countries, implementation of
investment programs and assistance to Armenian enterprises and on the
occasion of the 5th anniversary of "Master". Besides, the chairmen of
UMBA and UCMPC signed an agreement on cooperation between these unions.

The participants of "Kamurj 2008" continued their work at the round
tables on the following subjects: "Armenia as a Financial Center",
"Small and Medium Business. Prerequisites for Development", "Transport
and Logistics. Problems and Prospects". The conference "Investment
Attractiveness of the Region. Competitiveness, Diversification and
Efficiency" took place. Round tables on the subjects "Information
Society, Past and Present. Development Strategy of Information and
Communication Technologies" and "Construction Industry. Definition of
Processes and Methods, Development Prospects" will be held on the last
day of the forum - February 17.

The UMBA and the international integration assistance center "Master"
are the organizers of "Kamurj 2008". The event is being held with the
assistance of the RA ministry of trade and economic development, the RA
foreign ministry, the Central Bank of Armenia and the Armenian
Development Agency.

http://www.nt.am/news.php?p=1&c=e&t=0&r=0&year=2008&month=02&day=17&shownews=109704&LangID=1#109704

http://www.gab-ibn.com/IMG/pdf/Ar21-_Kamurj_2008_5th_International_Economic_Forum_Opens_in_Tsakhkadzor.pdf

[Siamanto]

Re: Armenia's Economic Pulse

Armenia's Financial System
Part III - Volume of Assets and Weight In Armenia's Economy


Assets Of The Commercial Banks

OVERALL BALANCE CAPITAL OF ARMENIAN COMMERCIAL BANKS GROWS BY 43% IN 2007

Noyan Tapan
Jan 31, 2008

YEREVAN, JANUARY 31, NOYAN TAPAN. As of December 31, 2007, 22
commercial banks with 347 branches operated in Armenia. According to
data of the Central Bank of Armenia (CBA), as of the indicated date
the actual authorized capital of these banks made 116 bln 486 mln
544 thousand drams (over 340 mln 524 thousand USD), growing by 45.4%
in a year and by 18.4% in the fourth quarter of 2007. The overall
balance capital of the banks made 171 bln 813 mln 689 thousand drams
as of December 31, 2007, growing by 43% in a year and by 15.8% in
the fourth quarter of 2007.

The overall liabilities of Armenian commercial banks amounted to
592 bln 576 mln 251 thousand drams as of December 31, 2007, growing
by 46.6% in a year and by 14.9% in the fourth quarter of 2007. The
same indices with respect to overall assets made 764 bln 389 mln 939
thousand drams, 45.7% and 15.1%.

As of December 31, 2007, standard credist and debts made up 97.6%
of the commercial banks' overall credits and bill receivable of a
total of 480 bln 300 mln 286 thousand drams.

The total amount of credits, deposits, sums provided by leasing and
factoring by banks to residents made 434 bln 461 mln 634 thousand drams
as of December 31, 2007, growing by 78.5% in a year and by 16.1% in
the fourth quarter of 2007. Sums of 56 bln 267 mln 153 thousand drams
were allocated to industry, they grew by 43.3% in a year and by 2.8%
in the fourth quarter of 2007; sums of 22 bln 374 mln 428 thousand
drams were allocated to agriculture, they increased by 57.6% in a year
and by 17.8% in the 4th quarter of 2007; the same indices with respect
to construction made 22 bln 33 mln 520 thousand drams, 90.9% and 26.7%
respectively; the indices with respect to transport and communication
made 5 bln 848 mln 986 thousand drams, 49.3% and 32.6% respectively.

Sums provided by Armenian banks to the trade sector in 2007 made 86
bln 791 mln 176 thousand drams, growing by 75.1% in a year and by
14.9% in the 4th quarter of 2007. Sums of 22 bln 298 mln 105 thousand
drams were provided to the financial sector of the economy, they grew
by 45.4% in a year and by 7.2% in the 4th quarter of 2007. Consumer
credits amounted to 123 bln 606 mln 735 thousand drams, growing by
80.7% in a year and by 19.9% in the 4th quarter of 2007. The same
indices with respect to mortgage crediting made 53 bln 367 mln 307
thousand drams, 124.5% and 16.1%; the indices with respect to other
sectors made 41 bln 874 mln 224 thousand drams, 140.2% and 38.1%.

As of December 31, 2007, the gross incomes of the commercial banks
made 114 bln 222 mln 447 thousand drams - against 86 bln 511 mln 114
thousand drams as of the same date in 2006. As of the indicated dates,
the gross expenditures made 87 bln 738 mln 734 thousand drams and
65 bln 470 mln 356 thousand drams respectively; the net profit - 21
bln 98 mln 710 thousand drams and 16 bln 870 mln 490 thousand drams,
the undistributed profit - 21 bln 43 mln 710 thousand drams and 16
bln 290 mln 499 thousand drams respectively.

http://www.nt.am/news.php?p=0&c=0&t=0&r=0&year=2008&month=01&day=31&shownews=109045&LangID=1#109045

Assets Of The Credit Organizations

OVERALL BALANCE CAPITAL OF ARMENIAN CREDIT ORGANIZATIONS GROWS BY 47.6% IN 2007

YEREVAN, FEBRUARY 1, NOYAN TAPAN. 21 credit organizations operated in
Armenia as of December 31, 2007. According to data of the Central Bank
of Armenia (CBA), actual authorized capital of these credit
organizations made 10 bln 935 mln 620 thousand drams (over 31 mln 968
thousand USD) as of the indicated date, growing by 30.4% in a year and
by 10.7% in the 4th quarter of 2007. The overall balance capital of
credit organizations made 12 bln 485 mln 834 thousand drams as of
December 31, 2007, growing by 47.6% in a year and by 13.8% in the 4th
quarter of 2007.

Overall liabilities of Armenian credit organizations amounted to 30 bln

889 mln 496 thousand drams as of December 31, 2007, growing by 154.6%
in a year and by 11.6% in the 4th quarter of 2007. The same indices
with respect to overall assets made 43 bln 375 mln 330 thousand drams,
110.7% and 12.2%.

Standard credits and debts made up 98.2% of the credit organizations'
overall credits and bills receivable of a total of 42 bln 405 mln 210
thousand drams as of December 31, 2007.

The total amount of credits, deposits, sums provided on leasing and
factoring by credit organizations to residents made 39 bln 589 mln 547
thousand drams as of December 31, 2007, increasing by 129.6% in a year
and by 12.9% in the 4th quarter of 2007. 4 bln 562 mln 656 thousand
drams, which was allocated to industry, grew by 106.8% in a year and by

5.4% in the 4th quarter of 2007; sums of 3 bln 838 mln 987 thousand
drams allocated to agriculture grew by 63.1% in a year and by 22.7% in
the 4th quarter of 2007; the same indices with respect to construction
made 1 bln 883 mln 456 thousand drams, 629.5% and 4.6% respectively;
the indices with respect to transport and communication made 1 bln 580
mln 953 thousand drams, 93.6% and 15.1%.

Sums allocated by the Armenian credit organizations to the trade sector

made 7 bln 481 mln 221 thousand drams, growing by 83.8% in a year,
declining by 8.5% in the 4th quarter of 2007. 1 bln 237 mln 561
thousand drams was allocated to the financial sector of the economy,
this sum grew by 14.2% in a year and by 81.4% in the 4th quarter of
2007. Consumer credits amounted to 7 bln 62 mln 322 thousand drams,
increasing by 132.7% in a year and by 20.2% in the 4th quarter of 2007.

The same indices with respect to mortgage crediting made 4 bln 563 mln
706 thousand drams, 187.4% and 13.6% respectively; the same indices
with respect to other sectors made 7 bln 378 mln 685 thousand drams,
303.1% and 29.8%.

Gross incomes of the credit organizations made 8 bln 929 mln 394
thousand drams as of December 31, 2007 - against 3 bln 400 mln 885
thousand drams as of the same date in 2006. As of the indicated dates,
their gross expenditures made 6 bln 694 mln 158 thousand drams and 3
bln 128 mln 229 thousand drams, net and undistributed profits - 1 bln
816 mln 497 thousand drams and 102 mln 972 thousand drams respectively.

http://www.nt.am/news.php?p=0&c=0&t=0&r=0&year=2008&month=02&day=01&shownews=109114&LangID=1#109114

Source Of The Assets

BALANCE OF POPULATION'S DEPOSITS WITH ARMENIAN BANKS GROWS BY 41.9% IN A YEAR

Noyan Tapan
Jan 31, 2008

YEREVAN, JANUARY 31, NOYAN TAPAN. As of December 31, 2007, the
monetary base made 427 bln 118 mln drams (about 1 bln 248.6 mln USD)
in Armenia, growing by 53 bln 55 mln drams or 14.2% as compared with
the previous month.

According to preliminary data transferred by the Central Bank of
Armenia to the RA National Statistical Service, broad money made 691
bln 343 mln drams as of December 31, 2007, growing by 39 bln 709 mln
drams or 6.1% as compared with the previous month.

The balance of the population's deposits with banks made 173 bln 45
mln drams as of December 31, 2007, growing by 10 bln 519 mln drams
or 6.5% as compared with the previous month and by 51 bln 124 mln
drams or 41.9% in a year.

http://www.nt.am/news.php?p=0&c=0&t=0&r=0&year=2008&month=01&day=31&shownews=109058&LangID=1#109058

ARMENIA BANKING SYSTEM TO KEEP ATTRACTING FOREIGN FINANCIAL MEANS

ARKA
April 8, 2008

YEREVAN, April 8. /ARKA/. Armenia banking system is to keep attracting
financial means from the outside, David Sargsyan, chief of Armenian
Central Bank's unit in charge of financial system policy, said Tuesday
on Public Television.

He said 80-percent growth of industrial and consumer crediting was
recorded in Armenia in 2007.

"It is natural that banks have to obtain necessary financial means
to provide due supply for growing demand. Foreign countries are one
of financial sources", he said.

Sargsyan said that now foreign investments make not a big part of
the financial means attracted by Armenian banks.

In his opinion, if they grow to 30 or 40%, risks will grow as well.

Sargsyan said that recent financial crisis in world markets has
stricken Armenia not so hard, because outside financial means are
little here.

He thinks the key source of the banks resources will be domestic
economy.

He said Armenian banks' aggregate assets total $2.5 billion while
$1.5bln to 2bln of foreign currency is now in circulation out of banks.

"The country faces problem how to attract them to banking system",
Sargsyan said.

According to ARKA News Agency's data, financial means attracted from
non-residents totaled AMD 151.6 billion ($498.2 million) by late 2007.

It means non-residents' means made 26.83% of all resources attracted
by Armenian banks by late 2007 against 18.61% earlier that year.

http://www.arka.am/eng/banks/2008/04/09/8892.html

How Do They Compare To Other CIS Banks?

HULIQ (press release), NC
June 6 2008

All Banks of Armenia in CIS Top 1000 List

All of the banks from Armenia are included in the list of top 1000
CIS banks, according to the volume of assets: a successful step by
Armenia that aims to make the country top financial center in the near
future bridging between Middle Eastern and European financial centers.

Following the results of 2007, all Armenian banks were included in the
list of 1000 CIS banks, according to the volume of assets.

Mediamax reports that the list of 1000 banks of CIS as to the volume
of assets is composed by the `Interfax-CEA' Agency.

`HSBC Bank Armenia' occupied the 272nd place in the list, assets -
$343mln.

Then come:

`Ardshininvestbank' occupied the 294th place, assets - $308,1mln;
`ACBA-Credit Agricole Bank' - 330th place, assets - $263,7mln;
`VTB-Armenia Bank' - 364th place, assets - $230,1mln;
`Converse Bank' - 408th place, assets - $192,9mln;
`Armeconombank' - 458th place, assets - $165,6mln;
`Unibank' - 488th place, assets - $149,7mln;
`Inecobank' - 564th place, assets - $117,5mln;
`Armbusinessbank' - 585th place, assets - $108,9mln;
`Anelik Bank' - 601st place, assets - $105,5mln;
`ARARATBANK' - 648th place, assets -$91,1mln;
`Artsakhbank' - 734th place, assets - $73,3mln;
`Armswissbank' - 743rd place, assets - $71,1mln;
`Areximbank' - 757th place, assets - $ 68,4mln;
`BTA-Invest Bank' - 813th place, assets - $58,7mln;
`Armenian Development Bank' - 903rd place, assets - $45,9mln;
`Prometey Bank' - 908th place, assets - $44,0mln;
`Mellat Bank' - 923rd place, assets - $37,1mln;
`Cascade Bank' - 926th place, assets - $36,0mln;
`Armimpexbank' - 935th place, assets - $33,2mln;
`ProCredit Bank' - 960th place, assets - $21,9mln;
`Byblos Bank Armenia' - 965th place, assets - $19,3mln.

Source: By Mediamax

http://www.huliq.com/61233/all-banks-armenia-cis-top-1000-list

What Is The Weight of The Sector In The Armenian Economy?

7 commercial banks of Armenia included in list of 100 largest tax payers of Armenia

2008-02-01 19:17:00

ArmInfo. 7 commercial banks of Armenia were included in the list of 100

largest taxpayers of the country according to the 2007 results.
According to the data of the State Tax Service of the Republic of
Armenia, HSBC Bank Armenia became the first bank in the mentioned list
by the volume of taxes paid in 2007. Having paid taxes worth a total of

1,618 bln AMD, 1,475 bln AMD of which were tax on profit and income
tax, it occupied the 31st place in the top 100. It is followed by
ACBA-Credit Agricole Bank, which paid 1,090bln AMD, 1,054bln AMD of
which were tax on profit and income tax and occupied the 57th place in
the top 100. Ardshininvest bank supplemented the budget by 922,3mln AMD

in 2007, including 854,3mnl AMD - tax on profit and income tax, thus
occupying the 65th place.

Armeconombank, which paid 877.3 mln AMD, 800.9 mln AMD of them being
profit and income taxes, ranks next and holds the 70th position. VTB
Bank (Armenia) holds the 91st position on the list of hundred largest
tax-payers in Armenia, having paid 635.6 bln AMD to the state budget in

2007, 585.3 mln AMD of them being profit and income taxes. INECOBANK
holds the 95th position, having paid 570.7 mln AMD, 561.6 mln AMD of
them being profit and income taxes. Unibank closes the list of the
banks which entered the top hundred of Armenian tax-payers. The bank
paid 567.3 mln AMD to the state budget, 546.9 mln AMD being profit and
income taxes. As of December 31, 2007, there were 22 commercial banks
in Armenia.

http://www.arminfo.info

[Siamanto]

Re: Armenia's Economic Pulse

Armenia's Financial System
Part IV - Informational Resources


Basic Information: ArmenianBanks.com



Banker.am

FIRST 100 DAYS OF BANKER.AM PROVES SUCCESS

ARKA
May 20, 2008

YEREVAN, May 20. /ARKA/. The first hundred days of the newly launched
Banker.am portal came to prove its necessity for Armenian society. The
originators of the project say the slogan of the portal "www.Banker.am
- the real banking sector" became a reality.

Survey shows that the site is among ten most visited sites in business,
finances and career categories.

Banker.am, founded in February, 2008, is an informational, analytical,
scientific, consulting, and educational website also offering, jobs
contests and entertainment.

Banking and financial news, description of the participants of
Armenia's financial and banking sectors, information on their services
and an interactive banking map, as well as the results of various
surveys carried out among specialists and people, economic forecasts,
and other related information can be found on the website. The visitor
can also read the opinion of bankers, professional consulting and
find vacancies.

Soon visitors will be able to submit requests for different banking
services and get offers from the banks and credit institutions choose
the one that fits their needs most.

A virtual game will soon be placed on the website. Any visitor may
create his own virtual bank and compete with others on Armenian market.

Among information partners of the project are ARKA News Agency,
Novosti-Armenia Agency, the Smart Systems Company, GIS info, Ararat
Magazine, "We about Us" Magazine, USAID, and Global SPC.

http://www.arka.am/eng/banks/2008/05/21/9486.htm

ARKA News Agency Indicators

ARKA AGENCY PUBLISHES QUARTERLY BULLETIN ON ARMENIAN BANKS' INDICATORS BY END OF Q1 2008

ARKA
May 12, 2008

YEREVAN, May 12. /ARKA/. The ARKA News Agency has published its
quarterly bulletin on Armenian banks' performance indicators recorded
by the end of the first quarter 2008.

The bulletin is based on banks' financial reports published in the
press, as well as on additional information provided by the banks.

The "Performance indicators of Armenian banks" bulletin includes about
80 pages of tables and ten sections dealing with the banking system -
1. General description of banks, 2.Assets, 3. Liabilities, 4. Asset
and liability transactions of banks with non-residents 5. Capital, 6.

Profit/Losses, 7. Money flow information 8. Liquidity and
capitalization level 9. Risk norms and 10. Bank profitability and
yield indicators.

The information contained in the bulletin is sufficient for forming an
idea of the financial state of Armenia's banks and making a comparative
analysis of their performance.

The ARKA News Agency founded on May 1 1996 specializes in financial,
economic and political information. ARKA started publishing the
bulletin "Credit organizations of Armenia" is 1999 and the quarterly
bulletin "Financial indicators of banks" in May 2006. The bulletins
are based on independent annual audits.

http://www.arka.am/eng/banks/2008/05/12/9373.html

ARKA News Agency Press-Rating

CONVERSE BANK, ACBA-CREDIT AGRICOLE, ARARATBANK, ARDSHININVESTBANK, ARMECONOMBANK ARE LEADERS OF ARKA'S 4TH QUARTERLY PRESS-RATING

ARKA
March 13, 2008

YEREVAN, March 13. /ARKA/. The Converse Bank, ACBA-Credit Agricole
Bank, Araratbank, Ardshininvestbank and Armeconombank are the top
five leaders of ARKA's fourth quarterly press-rating in 2007.

The Armenian press was active in covering activities of Armenian
banks in October-December 2007 (214.4% increase compared with the
corresponding period in 2006). The share of negative press-signals
was 3.4% in 2007 against 4.4% in the reporting period.

The increase of information on the following headings was as follows:
General (from 38.7% to 49.8%), Banking Activities in Figures
(15.5%-17%), Customers and Service (3.7%-5.1%), Banks' Economic
Forecasts and Opinions (5.9%-6.5%).

The share of the heading Bank Development Policy decreased from 26.2%
to 21.6% in the period under review.

In general, information on banks increased in the fourth quarterly
period of 2007.

In the reporting period, the ACBA-Credit Agricole Bank was the
leader on two out of five main headings: General (with 104.96 index),
Customers and Service (with 40.96 index). The Converse Bank was the
most active in reporting information about the Bank Development Policy
(with 251.16 index) and Banks' Economic Forecasts and Opinions (with
23.04 index).

The Ardshininvestbank ranked first in covering information about the
Banking Activities in Figures (with 99.97 index).

Six banks covered information on the above-mentioned headings in the
fourth quarterly period of 2007 against five banks in the corresponding
period in 2006.

The press-rating of the ARKA News Agency is based on the
financial-economic indicators of Armenian banks and media coverage
of banking activities. ARKA believes the more active is the press
coverage of the banks, the more effective are banking activities.

The subject of the ARKA News Agency's analysis is the actual
information on banks, not advertisement.

For a more detailed analysis of banking activities in the fourth
quarterly period of 2007, read the Press-Rating of Banks, Issue #09
(36).

Global Ranking Agencies

ARKA News Agency, Armenia
Jan 11 2008


Fitch ratings assigns rating `BB' forecast `Stable' to Armenia's `Akba-Credit Agricole Bank


YEREVAN, January 11. /ARKA/. Fitch Ratings international ratings
agency gave Armenia's `AKBA-Credit Agricole Bank' long-term issuer
default rating `BB' forecast `Stable', short-term issuer default
rating `B', individual rating `D' and support rating `3', reports the
official site of `Fitch Ratings'.

According to the report, the ratings of the Armenian bank reflect
moderate probability of receiving support, if needed, from the
biggest shareholder Credit Agricole S.A. French group (with long-term
issuer default rating `AA', forecast `Stable').

According to Fitch, even through the Credit Agricole S.A. group owns
the smaller package of the Armenia bank's shares (28%), still it can
provide support to `AKBA-Credit Agricole Bank' if needed bearing in
mind associating the brands, and active involvement of the group in
creating and monitoring of the bank that has not much grown yet. Yet,
Fitch stress that the minor package of the group and low priority of
the Armenian market may reduce the probability of receiving support.

The agency also pointed out a limited probability of receiving
support from the Armenian authorities if needed as the bank controls
considerable segment in agricultural lending (Armenia has long-term
`BB-`, `positive' forecast issuer default ratings both in foreign and
national currency).

Individual rating reflects small scale of `AKBA-Credit Agricole Bank'
as per the international standards, high risks of operation
environment, rapid growth of the bank's assets and large share of
lending in foreign currency. At the same time, Fitch says, the rating
takes into account good quality of AKBA management, considerable
client database in Armenia, high profitability from the main
activities, traditionally good quality of assets, strong
capitalization and adequate liquidity position.
According to the Fitch report, the potential for improving the bank's
long-term issuer default rating is limited and is possible only if
the share of the Credit Agricole S.A. group in the Armenian bank is
increased and/or if the group gives respective assurance of its
willingness to support the bank if needed.

Raising the country ceiling of Armenia from the current `BB' level
would also be a requirement for improving the long-term issuer
default rating of `AKBA Credit-Agricole Bank', Fitch says.
The long-term issuer default rating may be downgraded if Fitch
changes its opinion on the willingness of Credit Agricole S.A. group
to support `AKBA-Credit Agricole Bank' or if Armenia's country
ceiling is lowered (which is not expected taking into account the
current `Positive' forecast by sovereign ratings).

The potential for improving the individual rating of `AKBA-Credit
Agricole Bank' is currently limited due to small size of the bank and
high operation risks in Armenia. Yet, according to the rating agency,
further successful expansion of the client database, along with
maintaining the quality of assets and adequate capitalization, may be
a positive factor in the credit rating.
According to Fitch, considerable losses in credits may be a potential
reason for lowering the rating, but currently the bank has
considerable `reserve' of own means to absorb such losses.

`AKBA-Credit Agricole Bank' closed joint stock company is the third
biggest bank of Armenia in value of assets and lending volume. As of
the end of the 3rd quarter of 2007 the bank's share on these
indicators was 10% and 12% respectively. Apart from that, the bank
was the leader in the rural lending segment (70% of the market). AKBA
has 21 branches in Armenia; the number of the branches is expected to
reach 47 by the end of 2009.

`AKBA-Credit Agricole Bank' closed joint stock company (former Farmer
Mutual Support Bank of Armenia) was founded in 1995 and was
registered on March 29 1996. The bank was founded within the EU TACIS
program.
In September 2006 Credit Agricole French banking group purchased 28%
of the bank's shares. The remaining shares belong to 10 associations
of farmer mutual support involving over 45,000 farmers.

According to the official information, as of the end of September
2007, the total capital of `AKBA-Credit Agricole Bank' was 20.4bln
Drams, total assets were 68.9bln Drams, balance sheet profit - 3.7bln
Drams and profit was 2.3bln Drams by the end of January-September
2007 period. ($1=307.15Drams).

http://www.arka.am/eng/banks/2008/01/11/7680.html

The Rating Agency AmRating/GlobalRating has issued a new report on the Armenian Banking System Transparency. Attractiveness. Funding Scarcity.


2008-01-28 14:46:00


ArmInfo. The Rating Agency AmRating/GlobalRating has issued a new
report on the Armenian Banking System Transparency. Attractiveness.
Funding Scarcity.

GlobalRating Group press-service reports AmRating states that the
Armenian banking system is in an intensive development phase and has
drawn a lot of attention from foreign investors. Developed legislature,
strict prudential regulation, increasing competition and scarcity of
resources are conducive to the development of good corporate governance
standards, the accumulation of management experience, lowering
corruption and lower non-financial risks. Because of the strict
prudential monitoring and regulation by the Central Bank of Armenia,
commercial banks are in line with recent international trends and
moving towards Basel II standards. Liquidity and capital adequacy
measures are quite high, and the percentage of officially overdue loans
on the books is insignificant.

"The low politicization of the Armenian banking system is a positive
development. Its exposure to political risk is minimal, making banks
comparatively immune to potential shifts in the power structure,
lowering the overall country risk,''- said Executive Director Emmanuel
Mkrtchyan.

Despite the fact that most of the recent investors in the market for
banking services have been members of the Armenian Diaspora (both pre-
and post-Soviet waves) who carry little weight in political circles,
new non-resident institutional investors who may have specific
strategic goals are entering the market.

Interest from foreign investors in the controlling banks' stakes raises
questions as to whether Armenia's banking system will remain "national"
in character or will be controlled by foreign strategic investors.

In order to avoid the latter under conditions of scarcity of funding
resources, the regulator's idea of attracting capital by entering DPOs
and then IPOs is gaining momentum.

Analysts at AmRating/GlobalRating recognise the main development
strategies for the Armenian banking system in general and commercial
banks in particular as: 1. Increased capitalization. 2. Solving the
problem of a scarcity of long-term resources. 3. Preparation for the
gradual transition towards Basel II principles. 4. Expanding the range
of offered services. 5. Regional Expansion

The Global Rating Group - a family of rating agencies. The rating
agencies RusRating (Russia), KzRating (Kazakhstan) and AmRating
(Armenia) were created by Richard Hainsworth and have been brought
together in the Global Rating Group. In the near future the group plans
to add national rating agencies in Azerbaijan (AzeriRating), Ukraine
(Ua-Rating) and other CIS regions.

The primary goal of the Global Rating Group is to establish a network
of national rating agencies across the CIS, promoting national brands
and strengthening the market position of each agency in its own country
and the international community.

http://arminfo.info

[Federate]

Re: Armenia's Economic Pulse

Selon la FRA l’Arménie peut financer la construction d’un chemin de fer entre l’Iran et l’Arménie

samedi13 septembre 2008, par Stéphane/armenews

L’Arménie peut financer la construction d’un chemin de fer connectant le pays avec l’Iran sur le budget de l’état, a déclaré le membre du Bureau de la FRA Dashnaktsutiun Vahan Hovhannisyan.

« Nous devons trouver 1 milliards de drams pour la construction de la voie » a-t-il dit lors d’une conférence de presse.

Selon lui, le nouveau chemin de fer aidera à éviter la dépendance de l’Arménie en matière de transport vis-à-vis de la Géorgie qui est la seule voie actuelle permettant de connecterle pays avec le monde extérieur.

Récemment le ministre arménien des Transports et des Communications Gurgen Sargsyan avait annoncé que le Président Serge Sarkissian avait crée une commission pour étudier la question de la construction d’une voie de chemin de fer entre l’Arménie et l’Iran.

La Commission doit choisir le meilleur projet des trois projets disponibles. Selon les évaluations préliminaires, le plus avantageux est l’itinéraire Gagarin - Gavar - Martuni - Jermuk qui est le chemin le plus court pour aller aussi à Vanadzor et ensuite en Géorgie.

From http://www.armenews.com/article.php3?id_article=44240

---------------------

For those who don't know French, Google translate:

Armenia may finance the construction of a railway connecting the country with Iran on the state budget, said the Bureau member of the FRA Dashnaktsutiun Vahan Hovhannisyan.

"We have to find 1 billion drams for the construction of the track," he said at a press conference.

According to him, the new railway will help to avoid dependence on Armenia's transport vis-à-vis Georgia which is the only current path to connecterle country with the outside world.

Recently, the Armenian Minister of Transport and Communications Gurgen Sargsyan announced that President Serge Sarkissian had created a commission to study the issue of construction of a railway line between Armenia and Iran.

The Commission must choose the best project of the three projects available. According to preliminary assessments, it is more advantageous route Gagarin - Gavar - Martuni - Jermuk which is the shortest way to go also in Vanadzor and then in Georgia.

[Federate]

Re: Armenia's Economic Pulse

Greece helps farmers of Armenia in the region of Tavoush

The Greek government, through the Fund for International Development Greece, has made farmers happy in Armenia. In the region of Tavoush north of Armenia, farmers in eight communes now have a refrigeration room with a capacity of 200 tons with all equipment needed for its use. In addition, several tractors are part of the aid of Greece to Armenia. This equipment will enable the region to develop Tavoush benefit agriculture and the cultivation of the vine. With a large capacity storage reason other fruit harvested. The FRA Dashnaktsoutioun of Greece which contributes greatly to the development of Armenian-Greek relations is behind this achievement of the Greek government.

Originally in French http://www.armenews.com/article.php3?id_article=44838