Banks.am has talked to Anahit Shakaryan, Head of Investment Banking Department of AraratBank.

Please briefly state the reasons why the financial institutions in Armenia show interest in the international financial market. What are the challenges the market faces today?

I can definitely state that, especially in recent times, the financial institutions in Armenia have been paying more attention to the global financial market integration, which is absolutely due to the high demand among customers. On the other hand, the field is path-breaking for the RA banking and financial sector, and in many cases, the participants of the sector may face industry-specific problems which require additional efforts to be solved.  

From the perspective of effective investment management, this topic is relevant and vitally important both for individuals and legal entities.
One thing is for sure: the trend we have today will affect positively the customers of the bank as their financial literacy improves in line with the process of intensive integration with the system. These are the important factors that are fundamental to the development of the sector.   

As regards the challenges, they are largely interrelated with the macroeconomic stability and foreign policy in the country, since this involves international relations. Financial institutions, especially the ones operating in the foreign market, should be careful in choosing partners, given not only the stability of the partner but also the activities often determined by political and credit risks. In the financial sector, the lack of qualified managers in the team is obvious and very often represents an obstacle.

It is well known that the global financial markets have always captured investors by the variety of financial instruments and high liquidity. In addition to the financial instruments available in the local market, are our citizens provided with an access to the broad financial toolkit offered by the international market today and if so, how?

Today we can say that the Republic of Armenia is home to the licensed companies which provide access to the services and a wide range of financial instruments available in the global financial market.
It is noteworthy that AraratBank has recently signed a new cooperation agreement, expanding the range of services provided in the global financial market and therefore providing access to around 5,000 top-performing financial assets: securities of over 12 countries, including shares listed on the most reputable stock exchanges in the United States and Europe, a number of commodities, currency pairs, stock indices and other financial instruments.

All AraratBank customers, who are ready to invest in the global financial market within acceptable risk exposure, may take full advantage of the instruments above through the AraratBank TRADING PLATFORM, which is a safe and user-friendly trading platform with innovative solutions. It is available on Desktop and Web browsers as well as iOS and Android operating systems. As a matter of fact, our skilled employees are ready to support both beginner and professional customers in managing their funds efficiently.  

Would you please highlight the advantages that make you stand out from other companies providing similar services in the market?

Trust is, perhaps, the first and foremost circumstance, which I consider necessary to emphasize. The Central Bank of Armenia exercises control over the commercial banks operating in Armenia, including Araratbank. It should be noted that the regulatory body in our country - the Central Bank of the Republic of Armenia - is guided by stringent control and regulation policies, which is an important indicator to have trust in banks.   

At that, the availability of banking services, professional team, multilingual customer service, competitive rates, and working across time zones are the important benefits for AraratBank customers. Moreover, each customer will have a personal manager to assist in managing invested funds skilfully and correctly.    

It is worth mentioning that improving financial literacy of the population is a key precondition for the sustainable and efficient development of the field. Moreover, the more comprehensible and simpler the information is, the more efficient and profitable the transaction of the customer will be. Our team provides information using understandable terms and simple language.     

In your opinion, how much money on average does a beginning investor needs to start investing?  

This is one of the most frequently asked questions, the answer to which is rather ambiguous. Beginning investors must first of all be sufficiently informed about the financial markets, have a clear knowledge of the risk/reward ratio, and only then start investing. An investor can even manage an investment of 500 U.S. dollars efficiently, if he or she possesses the required knowledge. Our team plays a major role in the vital processes of guiding customers properly, executing transactions accurately, and identifying the right solution for a problem.     

Given my professional background of over two decades in foreign and local financial markets, I assure that you can consider an average of 10,000 to 20,000 U.S. dollars for the efficient management of a diversified portfolio. As I noted before, a number of factors, including but not limited to investors’ ideas and considerations, readiness to take a risk, should be considered before making any investment.

In this context, I would like to underline that the large volume of assets managed in the financial market can be easily diversified, reducing the impact of market risks on the investment portfolio.

The Internet is brimming with a variety of appealing offers. What should investors be wary of? Are all brokerage firms trustworthy?   

The Internet is indeed flooded with numerous appealing offers. However, the so-called “unscrupulous brokers”, which are not licensed by the Central Bank of the Republic of Armenia, are active in the virtual reality.  Brokers like these, as a rule, come up as legal entities registered in reputable companies in Europe, controlled by European or Australian regulators. As a result, services are provided to citizens through a company registered in an offshore country, which is definitely not regulated.    

Insecure storage of funds, low liquidity of assets, and open position frauds are the main risks our citizens often face.   

Based on the experience of countries with enhanced financial systems, it can be stated that improving the financial literacy of population is the most efficient way to combat financial fraud. It is noteworthy that, in addition to providing investment services, our bank is committed to improving the financial literacy of population.   

Today, a number of large international companies provide services based on CFD contracts, which enable customers to increase the liquidity of investments paying low commission fees. Transactions in AraratBank TRADING PLATFORM are also concluded based on СFD contracts, which will in the end enable our citizens to execute transactions with a safety cushion at hand.   

I find it important to emphasize that citizens should place trust only in the financial market participants, which are licensed by the Central Bank of the Republic of Armenia. However, if they prefer the services provided by foreign companies, it is necessary to analyze the financial situation of the company, the field of regulation, and the documents to be signed very carefully.