Azerbaijan, Baku, 17 June / Trend corr I. Khalilova/ "International Finance Corporation (IFC) has completed expertise of laws on creation of the secondary mortgage market in Azerbaijan," Azar Aliyev, financial analyst of IFC project on technical assistance to housing financing in Central Asia and Azerbaijan, said on 17 June. IFC proposals on the Bill on Mortgage Bonds will be submitted to the National Bank of Azerbaijan (NBA) this week.
According to NBA, securitization will be introduced stage-by-stage in the country, as the process is difficult and it is impossible to commence it at once. First, mortgage bond institutions must be established in the country, both the local and foreign investors must consolidate themselves in the Azerbaijani mortgage market in.
As per the international practice, separate private investors are not sufficient to have a stable securitization market.
Due to rising incomes of private persons and companies, primary elements are already functioning in Azerbaijan to achieve an appearance of institutional investors in the person of well-capitalized insurance companies, private pension funds, as well as assets managing companies. Their incomes enable to form not only savings but also to establish investors' institutes which have not only bank deposits in their assets, but would like to have other financial instruments to manage their assets. NBA plans to develop juridical proposals by the end of the year to introduce securitization in the country.
NBA thinks insurance companies and private pension funds, to be established in near the future, are not enough. Private investment companies, assets managing institutes and institutional investors may invest.
For the time being, mortgage market in Azerbaijan comprises of only $150mln. One securitization deal requires some $100mln; therefore, introduction of this instrument in the country is a bit too early.
On 17 June, the official exchange rate totalled 0.8176 AZN/USD.
The correspondent can be contacted at [email protected]