Capital markets - additional catalyst for Azerbaijan’s economic recovery?

Business Materials 18 December 2017 08:00 (UTC +04:00)

Baku, Azerbaijan, Dec. 18

By Azad Hasanli – Trend:

Capital markets may become an additional catalyst for Azerbaijan’s economic recovery, Vugar Namazov, chairman of the Executive Board at the Baku Stock Exchange, told Trend.

Namazov noted that local investors have a lot of excess liquidity, but the current tools of the stock market are not enough for its sale.

For example, as Chairman of Azerbaijan Banks Association Zakir Nuriyev said earlier, liquidity of the banking sector alone reaches 6.5 billion manats, Namazov added.

"For example, demand for state securities exceeds supply three or four times," he said. "However, state securities alone are not enough for the sale of the accumulated liquidity, and the state securities shouldn’t be the only tool for investors."

"On the other hand, there are companies that need funds," Namazov added. "However, the old scheme, according to which a company placed its money in a bank, and then the bank lent to the real sector using these funds, isn't as effective as it was before."

"Companies invest their money in banks less often, and the banks can no longer allocate the money to the real sector because the conditions and criteria in the market changed," Namazov said. "As a result, excess liquidity is accumulated in banks, and in order to re-direct the liquidity to the real sector, it is necessary to use experience of capital markets. In this case, capital markets can offer ideal solutions and become an additional catalyst for processes that will accelerate and optimize Azerbaijan’s economic recovery."