Azerbaijan Should Expect Favorable Situation in World Market for Debut Issuance of Eurobonds: Expert (video)

Business Materials 15 February 2008 19:42 (UTC +04:00)

Azerbaijan, Baku, 15 February / Trend / The instability in the world finance markets contains a large impulse for Azerbaijan. It is the Government that is stopping the process of debut issue of Eurobonds. According to the information by Azerbaijan's Ministry of Finance, currently the Country has not activated the measures to organize issue of Eurobonds. Thus, the process of Azerbaijan's joining the world finance system is stopped.

Earlier, the Government of Azerbaijan announced the periods for the first issue of the Eurobonds at the end of 2007. Dublin Stock Exchange, markets in Luxemburg, London, New York, Frankfurt, Tokyo and Singapore were considered the squares for the placement of these issues.

Following the Government, the major banks, State Oil Company of Azerbaijan, Azerbaijan Investment Company- will issue their Eurobonds. They expect the placement of the first Eurobonds in order to determine the base conditions for themselves, to connect their securities to the foreign markets.

However, due to the world financial crises, Azerbaijan decided for the exact periods of issuance of the first sovereign Eurobonds of Azerbaijan. The mortgage crises are still developing in the world financial markets, especially in the USA and it has unfavorable impact on the financial system of many countries.

The prospects of the US economy worsened recently and it is a signal for the US Federal Reserve System to again decrease the base interest rates, the Head of the Reserve System, Ben Bernanke, said on 14 February in the banking committee of the US Senate. The fall in the US economy brings delays to the economic growth of the European economy, said Stephen Jen, Managing Director of British Morgan Stanley Bank.

In addition, the high oil prices gave an opportunity to Azerbaijan to collect the high budget surpluses and double the currency reserves in 2007. If the oil prices will remain high, the government will have no reasons to collect funds from the foreign capital markets. It again testifies that the debut issuance of the Eurobonds is mostly linked with the growth of the country's image and access to the European markets.

Therefore, Azerbaijan needs to expect more favorable situation in the world financial markets for the debut issuance of the Eurobonds. It is better to expect one or two months or may be a year, so that the first issuance is successful and brings both the economic and political dividends to Azerbaijan.

Ellada Khankishiyeva, expert of Trend Analytic Center.

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