Investment Review №337. A shift toward hedging

Telecom Armenia: 1-Year Stock Trends

 

ACBA Bank: 1-Year Stock Trends

 

 

USD/AMD: 1-Year Dynamics

 

 

3-Year Corporate Bond Index (AMD) – Post-Update

 

Market Performance

Between January 12 and 26, 2026, the Armenian stock market maintained a positive trend. Telecom Armenia (AMTL) gained 0.5%, closing 1.0% above the start-of-year level. Published statistics showed that Communication Services sector revenue in November rose 2.4% YoY and 0.8% MoM, exceeding the average monthly growth rate since the start of 2025 by 1.0 percentage point. ACBA Bank shares outperformed, climbing 7.2%, likely supported by sector data showing a 27.8% YoY increase in net profit for 2025, placing the bank among the top three by net income and loan portfolio, with profit growth surpassed only by two of the top-five banks.

The three-year corporate bond price index (in AMD) rose another 0.2%, pushing yields lower. In addition to stable inflation and a relatively accommodative monetary policy by the Central Bank, the move was likely supported by improved economic forecasts and Fitch’s revision of Armenia’s sovereign foreign-currency outlook from Stable to Positive, while affirming the BB- rating. This combination, together with falling yields, may encourage capital inflows and support new corporate issuances in the local market. Overall, these factors are likely positive for business activity and demand for Armenian financial instruments. 

The Armenian dram slightly strengthened, reaching its highest level since 2012, supported by high non-commercial inflows, which rose 28.8% YoY in November 2026, compared with an average monthly growth of 26.0% over the first 11 months of 2025. Export and import statistics, which also affect currency flows, indicate improvement in the second half of 2026, although the trade deficit widened in October–November.

Economic Updates

Between January 12 and 26, 2026, Armenia’s macroeconomic statistics indicated a seasonal cooling in the real estate market, while showing stable dynamics in annual terms. Among the news, a moderately positive development was Fitch’s revision of Armenia’s outlook on its Long‑Term Foreign‑Currency Issuer Default Rating (LTFC IDR) to Positive. In addition, the World Bank raised its forecasts for the country’s economic growth. 

• The World Bank sharply upgraded Armenia’s GDP growth forecasts to 5.2% for 2025 (+1.2 percentage points versus June projections) and 4.9% for 2026 (+0.7 percentage points versus June), reflecting the high adaptability of the economy. On inflation, there is consensus among international institutions for 2026—EADB: 3.3%, IMF: 3.0%, World Bank: 4.0%—broadly within the Central Bank of Armenia’s target range of 3±1%. We believe the combination of sustainable growth and controlled price pressures will support risk-on sentiment in the local market.
• Fitch revised Armenia’s sovereign rating outlook at BB‑ from Stable to Positive, reflecting higher international reserves and resilient GDP dynamics. At the same time, the agency projects real economic growth of 5.5% in 2026 and above 5.0% in 2026–2027, supported by the anticipated opening of the Amulsar mine. Fitch also expects the Armenian government to meet its target fiscal deficit of 4.5% in 2026. The improved outlook is underpinned by successful fiscal consolidation and a de‑escalation of geopolitical risks amid progress in peace negotiations. We believe this credit‑positive development will create conditions for stronger capital inflows into the region and further narrowing of sovereign bond spreads, all else being equal. 
• The Armenian real estate market showed stable dynamics in November 2025. Purchase‑and‑sale transactions totaled 5,370 (+0.6% YoY, −13.4% MoM), which in our view points to seasonal/cyclical cooling. The total number of real estate operations declined to 21,144 (vs. 21,030 a year earlier and 22,738 in October), confirming overall stability of market activity.

Corporate News

• Fitch revised Ardshinbank’s rating outlook from Stable to Positive, while affirming the bank’s long‑term issuer default rating at BB‑ and viability rating at bb‑. The move may serve as a moderately positive signal for the perception of the bank’s credit profile and its access to funding. However, the rating level itself remains within the speculative category.

Two-Week Outlook

In the coming two weeks, Armenia is set to release a key block of macroeconomic statistics, including revised annual figures. The external trade data will clarify currency flow dynamics and determine the contribution of net exports to Q4 GDP. Consensus forecasts point to a moderate widening of the trade deficit. Particular attention will be focused on the Index of Economic Activity (IEA). Market expectations suggest some cooling in growth momentum to +7.0% YoY in December, following the sharp November surge of +10.4% YoY.
We do not expect surprises from the upcoming Central Bank meeting: the regulator is likely to keep the policy rate unchanged against the backdrop of the previously observed acceleration in inflation. The release of the January Consumer Price Index (CPI) may prove to be a critical indicator for adjusting market expectations on monetary policy. We forecast stabilization or a slight deceleration in CPI, taking into account the correction in domestic fuel prices. 

Double‑digit growth in construction volumes is expected to be maintained in December, despite a projected slowdown to +15.0% YoY versus +17.2% in November. Overall, the continuation of moderately positive macroeconomic trends, combined with the de‑escalation of geopolitical tensions, is likely to encourage foreign investment inflows and support local financial markets over the medium term.