Investment Review №329. It's time to take a risk

Telecom Armenia: 1-Year Stock Trends

 

ACBA Bank: 1-Year Stock Trends

USD/AMD: 1-Year Dynamics

From September 8 to 22, the Armenian stock market saw modest gains. Shares of ACBA Bank (ACBA) rose 0.28%, Telecom Armenia (AMTL) advanced 0.8%, while Tell Cell (TLCL) remained unchanged. While the specific drivers behind these moves are difficult to pinpoint, strong domestic demand, moderate inflation, and continued inflows of foreign investment remain key supportive factors for equity growth.

The three-year corporate bond price index dipped slightly by 0.09% but has maintained a positive trend since late June 2025. The Armenian dram (AMD/USD) exchange rate changed by 0.12%, maintaining overall stability as it trades near its yearly peak. Factors supporting the dram include ongoing economic growth, high real interest rates, and improved regional stability.

Economic Updates

• Following its September 16 meeting, the Central Bank of Armenia kept the refinancing rate unchanged at 6.75%. The lombard repo rate and the deposit facility rate also remained steady at 8.25% and 5.25%, respectively. The decision was widely anticipated, particularly given the slight uptick in inflation to 3.6% y/y in August. The press release emphasized the Board of Directors’ firm commitment to a strategy aimed at maintaining the inflation target of 3% over the medium term. Maintaining the current refinancing rate level through the end of 2025 appears most likely.
• Industrial production in Armenia totaled AMD 1,502 billion in January–July 2025, representing a 9.8% decrease compared to the same period last year. In contrast, the services sector grew by 10.6% y/y, reaching AMD 2,177 billion, according to data published by the National Statistical Committee of Armenia. The sharpest contraction was seen in manufacturing, which dropped 16.1% y/y, while the mining sector posted a more modest reduction of 1%. Meanwhile, the supply of electricity, gas, steam, and conditioned air expanded robustly by 14.1%. Within the services sector, the strongest performance came from the information and communication segment, which rose 19.1% to AMD 454.5 billion. Financial and insurance activities followed with a 16.2% increase, totaling AMD 671.9 billion. Other sectors showing positive momentum included accommodation and food services (up 4.3%), professional, scientific, and technical services (up 7.7%), and healthcare and social services, which advanced by 8.2%.
• Construction output in Armenia grew by 20.2% in January–July 2025 compared to the same period last year, totaling AMD 293.3 billion, according to the National Statistical Committee of the Republic. State budget-funded construction surged 30.9%, reaching AMD 71.3 billion during the seven-month period. Projects financed by organizations increased by 18.1% to AMD 136.0 billion, while household-funded construction rose 16.4%, amounting to AMD 73.3 billion.

Corporate News

• Moody’s downgraded the long-term corporate rating of Electric Networks of Armenia from Ba2 to Ba3. According to the agency, the downgrade reflects increased exposure to government influence and regulatory risks following amendments passed in July 2025 that allow the government to nationalize the company and empower the regulator to initiate administrative proceedings. The nationalization of Electric Networks of Armenia is irreversible and indisputable, Armenian Prime Minister Nikol Pashinyan stated. He outlined two possible scenarios: the first involves full nationalization with the company placed under professional state management. The second scenario envisions handing control to a reputable international manager if the costs of full nationalization prove disproportionately high for the state budget.
• The U.S.-based technology leader Cisco pledged to support the growth of Armenia’s tech education landscape. A memorandum of understanding was signed recently between Cisco and Armenia’s Ministry of High-Tech Industry. In parallel, Cisco inked MoUs with the TUMO Center for Creative Technologies and the Technology Education Foundation. This collaboration is anchored in Cisco’s Networking Academy program, designed to cultivate professionals equipped with the expertise to design, implement, and maintain sophisticated computer networks. Integrating this initiative into Armenia’s educational infrastructure is poised to accelerate the development of digital competencies among the youth and drive the broader digital transformation of the national economy.

Two-Week Outlook

On Friday, October 3, the inflation data for September is scheduled for release, with forecasts projecting a 3.2% y/y increase, down from the 3.6% y/y recorded in August.

Following that, on Monday, October 6, the unemployment rate figures will be published, with expectations of a 13.5% reading, marking an improvement from the 13.9% observed in August.