Investment Review №336. Choosing a direction

Telecom Armenia: 1-Year Stock Trends

 

ACBA Bank: 1-Year Stock Trends

 

 

USD/AMD: 1-Year Dynamics

 

 

Market Overview

From December 29, 2025, to January 12, 2026, the Armenian stock market experienced a classic year-end rally, commonly referred to as a “Santa Claus rally.” Telecom Armenia (AMTL) posted moderate gains of 1.7% over the period. Shares of ACBA Bank (ACBA) strengthened by 4.2%, returning to historical highs last seen in late May 2023, signaling renewed investor interest in the financial sector. The primary driver was likely macroeconomic data, which appeared to offset any potential modest negative impact on the bank’s net interest income from the Central Bank’s 25-basis-point rate cut. Given the limited size of the monetary impulse and the gradual nature of the rate adjustment, the risk of a significant reshaping of the yield curve remains contained.

The price index of 3-year corporate bonds denominated in Armenian drams rose by 0.2% amid a Central Bank rate cut, with yields slightly declining. Cooling inflation, combined with monetary easing and discussions by the regulator regarding market expectations for further rate reductions over the medium term, suggests moderate support for real returns on domestic debt instruments. This macroeconomic backdrop may stimulate demand in both the bond market and the broader financial markets of the country. Meanwhile, the stable dram exchange rate, supported by a relative normalization of foreign trade flows, further enhances the country’s investment climate and reduces currency risk for foreign investors.

Economic Updates

Between December 29, 2025, and January 12, 2026, Armenia saw a modest acceleration in inflation in the wake of the Central Bank’s December rate cut. Economic activity continued to expand at double-digit rates, with a modest pick-up observed in November. At the same time, external trade trends continue to signal a recovery in volumes. 

• Inflation in Armenia accelerated in December following a slowdown in November. Headline inflation reached 3.3% YoY, exceeding both the expected 2.8% and November’s 3.1% YoY. For the full year 2025, inflation averaged 3.3%, remaining close to the Central Bank’s target level (3.0% ±1 percentage point) but below the forecast range outlined in the Q3 2025 Monetary Policy Report (3.7–4.1%, depending on the scenario). This stable inflation trajectory within the target range provides a supportive macro backdrop for investment activity, ensuring relative predictability of real yields in the local bond market and underpinning investor sentiment over the short- to medium-term.  
• The Central Bank of Armenia cut the refinancing rate by 25 basis points to 6.50% in the second half of December. The decision followed disinflationary signals from the country’s CPI data, which showed a slowdown in price growth in November. The regulator also indicated that the market anticipates an additional 25-basis-point rate cut in the medium term. The rate reduction is likely to have a moderately positive effect on domestic demand, further supporting economic activity, which has been expanding at double-digit rates in recent months.
• In November, Armenia’s economic activity accelerated to 10.4% YoY, slightly below expectations of 12% YoY, although monthly activity fell by 0.9% MoM. Overall, the double-digit growth in the index represents a moderately positive signal for the market. Cumulative growth over the first 11 months reached 8.3% YoY. Key drivers were the industrial sector and construction, while domestic trade remains a weak spot. 
• Armenia’s foreign trade turnover in November showed strong growth, rising 15.3% YoY and 16.2% MoM. Exports outpaced imports, increasing 17.3% YoY and 18.1% MoM, compared with 14% YoY and 15% MoM for imports. The data indicate a partial offset of the shock from the decline in processing and re-export of precious metals. At the same time, the widening of the trade deficit to its lowest level since March 2023 suggests that the contribution of net exports to GDP at year-end turns slightly negative, partially offsetting the impact of accelerated economic activity in November. 

Corporate News

Alpha-Pharm, one of the leading players in Armenia’s pharmaceutical market, is launching a public offering of dram-denominated bonds totaling AMD 1.5 billion (≈$3.96 million). The bonds carry an 11.3% annual coupon with yearly payments and a 36-month maturity. The offering will run from December 10, 2025, to February 11, 2026, or until fully subscribed. Proceeds will be used to fund the company’s CAPEX program.

Two-Week Outlook 

From January 16 to 26, no major macroeconomic releases are scheduled for the Armenian market. However, revised data are expected during this period. Slightly later, December statistics across several indicators should be published, providing insights into year-end trends and allowing for updates to the medium-term forecasts. 

Trade data are expected to clarify currency flow dynamics and the contribution of net exports to GDP growth in Q4, although no major shifts in the statistics are anticipated. The economic activity index for the final month of last year will also be released, which, together with industrial production data, should shed light on the current trends in the country’s economy and indicate whether double-digit expansion has persisted. The Producer Price Index (PPI) will remain an important indicator of inflationary pressures along the production chain, though significant surprises are unlikely in the absence of shocks in global commodity and energy prices. Retail sales for December will also be closely watched, as they should provide insights into consumer demand, which notably cooled in 2025—slowing from double-digit growth in 2023–2024 to 0.9–4.1% in 2025.