Investment Review №354. AI lends a hand to the bulls

Telecom Armenia Stock Performance (Post-IPO)

ACBA Bank: 1-Year Stock Trends 

USD/AMD: 1-Year Dynamics

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

From September 7 to 21, 2026, Armenia’s market delivered subdued, mixed performance amid a Central Bank rate hike. Telecom Armenia (AMTL) edged down 0.2%, while Acba Bank was flat, preserving a 33.6% YTD gain. On September 15, the Central Bank raised the refinancing rate by 25 bps to 6.75% in response to inflation running above target, a move we had flagged as likely and one that should not have surprised the market. If pro-inflationary forces persist, given supply-chain disruptions tied to recent geopolitical escalation and oil prices above $90/bbl, further near-term policy tightening remains possible.

In debt, the 3-year Corporate Bond Price Index slipped 0.2%. We do not expect the Central Bank’s rate hike to materially affect sentiment or activity in the local bond market, given only moderate tightening and the move being at least partly priced in. Likewise, we do not foresee a significant impact on corporate bond prices or yields, given low market liquidity and already wide spreads.

The dram was broadly stable versus the U.S. dollar (-0.1%).

Economic Updates

On September 15, the Central Bank of Armenia raised the policy rate by 25 bps to 6.75%. While market consensus had looked for a hold at 6.50%, the move was broadly anticipated, given that inflation has remained above the 3% ±1 pp target band since February. Given the modest degree of tightening, we do not expect a material shift in market sentiment or local investment activity.

The Eurasian Development Bank expects the refinancing rate to rise further to around 7% by year-end. This is consistent with our view of near-term monetary tightening amid rising inflation risks and expectations, driven primarily by external shocks.

The European Parliament approved a temporary suspension of import duties on a broad set of Armenian-origin goods, including selected agricultural products. EU estimates indicate the package would liberalize roughly 80% of Armenia’s exports to the bloc and remain in force for two years after entry into effect. The measure still requires Council approval and is not yet in force. If enacted, it could partially ease trade-balance pressures, which have been exacerbated by Russian restrictions, by redirecting some flows to the EU.

Corporate News

Ineco Group, the parent company of Inecobank, has signed an agreement to acquire a controlling stake in Slovenia’s Hranilnica LON, marking a key step in its European banking expansion.

Two-Week Outlook

Between September 25 and October 5, 2026, August macro releases are due, with focus on the economic activity index, where consensus expects a modest slowdown to +6.2% YoY, and September inflation data. Following the Central Bank’s rate hike, markets will gauge implications for the price trajectory. However, the impact of the hike will show up only in later prints. The September inflation print will largely reflect prior conditions, implying a reacceleration. Consensus stands at 4.9% versus 4.4% YoY previously. Investors will also track progress on the EU Council’s approval of trade preferences.