BAKU, Azerbaijan, September 25. The development of capital markets can play a significant role in the growth and diversification of Azerbaijan's economy, as well as in expanding financing opportunities for companies, Executive Director for Development & Agency Finance at Standard Chartered Bank, Desislava Radeva, said during the 2nd Azerbaijan International Investment Forum held in Baku today, Trend's correspondent reports from the event.
She noted that a significant portion of the population traditionally prefers to keep their funds in bank deposits. However, stock markets are important for wealth distribution, increasing return opportunities for retail investors, and diversifying investment portfolios.
"Capital markets play a major role in economic growth and diversification. Efficiently functioning capital markets are crucial for expanding investment portfolios, including those of national funds," Radeva pointed out.
According to her, the development of capital markets in Azerbaijan requires not only the activity of the Baku Stock Exchange but also appropriate legislation and support from government institutions.
"The Baku Stock Exchange knows very well what needs to happen. They have their own tools and sound strategies. External factors should also be part of the process. Proper legislation at the national level, along with the necessary support from key institutions and the government, can bring about real change," she explained.
Radeva emphasized that Azerbaijan possesses significant capital potential.
"We are talking about an Azerbaijan that is sufficiently capitalized. There is no shortage of equity capital in the country. It’s no coincidence that the level of national debt is very low," she noted.
She mentioned that the raising of funds by Azerbaijani companies from local or international capital markets is not solely aimed at financing new investments.
"It's also significant in terms of international reputation and visibility, the use of shares instead of cash in mergers and acquisitions, long-term value creation, and achieving sustained liquidity that facilitates investor entry and exit. A proper ecosystem must be established for this," Radeva underscored.
According to her, the development of efficient capital markets is a long-term process.
"The London Stock Exchange is over 300 years old. Creating efficiently functioning capital markets takes time. It’s not a process that happens overnight. The key issue is establishing a dialogue," the Standard Chartered representative said.
Radeva noted that Standard Chartered collaborates with international stock exchanges in the Trans-Caspian region, Central Asia, and other emerging markets.
She also highlighted the importance of dual-listing opportunities between the Baku Stock Exchange and the London Stock Exchange.
"Local investors should have the same access opportunities as international financial institutions when major, significant IPOs are conducted," Radeva said.
According to her, unlike investment banks and other market participants, stock exchanges have a vested interest in the long-term success of companies.
"We are very different from investment banks and other market participants. We provide the infrastructure upon which the market operates. At the same time, we are interested in the long-term success of companies. Once an IPO is concluded, banks and lawyers step away from the process, whereas the issuer and the exchange remain," she noted.
Radeva stressed that it is not advisable to bring companies to capital markets without adequate preparation.
"We never encourage companies to enter the market before they are ready. We always focus on their success and on ensuring that their long-term success aligns with our interests. An efficient capital market is an environment where companies can succeed," she added.
