Growth and Prospects of the Investment Sector: Apricot Capital's Executive Director on the Market and "Money Lessons"

We spoke with Vachik Gevorgyan, Executive Director of Apricot Capital investment company, regarding the development and future prospects of the investment sector in Armenia.

In the last year or two, the turnover and taxes paid by investment firms in Armenia have increased significantly. Has this been driven by international business, or is it also due to an increase in serving local clients?

It is worth noting that Armenia's financial system has undergone significant development in recent decades, with banks consistently appearing on the list of major taxpayers. Of course, the significant influx of capital into Armenia in recent years, along with the resulting demand for financial services exports, has played a major role in the growth of our sector. Compared to its size, Armenia has captured a fairly large market share. According to recent official data, approximately 10% of financial services are exported. For investment firms, that percentage is likely even higher.

The growth of investment companies is a natural stage in the financial evolution of society. People are transitioning from simple savings to active investing, a standard pattern in developed economies. Currently, there are 23 investment companies licensed by the Central Bank of Armenia (CBA). Established banks also offer investment services.

Observing the market, we see clear segmentation: local investors are more numerous, but they generally hold smaller investment portfolios. The opposite is true for foreign investors—they are fewer in number, but their investment volumes are substantial.

Regarding taxes, I should mention that, according to the results from the fourth quarter of 2024, Apricot Capital was ranked 72nd among Armenia's major taxpayers. We paid approximately 4.3 billion AMD in taxes.

Thanks to our infrastructure, technological capabilities, and the speed and quality of our service, we have been able to accommodate an influx of foreign clients, including institutional ones, by providing services that meet international standards.

Our company's goal is to increase the number of retail investors in Armenia by introducing them to investment opportunities in securities. These opportunities can serve as an alternative to more traditional investment tools, such as real estate, gold, and bank deposits.

In which sectors do investment companies primarily make investments?

There is a widespread misunderstanding among the general public in Armenia regarding the activities of investment companies. Licensed firms like Apricot Capital do not invest in projects or programs on behalf of their clients. Rather, they act as intermediaries, connecting investors with investment instruments.

For example, direct investments in private company capital are managed by private equity funds, which are not yet prevalent in our country. Investment companies primarily provide brokerage and dealer services, meaning they purchase securities or foreign currency based on client orders.

The quality and competitiveness of our services depend on our ability to execute transactions quickly and cost-effectively. As you can see from the figures presented, we are capable of providing the required solutions. Naturally, many clients are primarily interested in global market securities because our local market is still very small.

In other words, our investment companies can also provide their clients with access to global markets?

Yes, and the range of these instruments has grown significantly. A few years ago, the sector's primary transactions were foreign exchange and bond trading. Now, equity and derivative instruments have been added to the mix. I believe that transaction involving crypto-assets will also increase once the Central Bank finalizes the regulatory framework. Overall, both the number of accessible markets and the variety of instruments have grown.

Exchange listings by non-financial companies remain limited. Are you noticing a growth in interest from these companies, or is it not yet visible?

Until 2023, the primary issuers were indeed banks. For banks, this instrument was a serious alternative to deposits for raising funds, especially since they typically set bond yields 0.5–1% higher than deposit rates. It's also worth mentioning that individual investors enjoy income tax exemptions on bond returns through the end of 2027. In contrast, bond issuances by non-financial organizations were much rarer.

However, the situation changed significantly in 2024–25. We are seeing increased activity from construction, IT, telecommunications, and mining companies. The bonds offered by these firms provide yields that are 3–4 percentage points higher. It's important to note, though, that unlike bank-issued bonds, these bonds are not guaranteed by the Deposit Guarantee Fund of Armenia, so they carry higher risk.

These developments have resulted in the local corporate bond market crossing the 700 billion AMD threshold and approaching 2 billion USD.

Armenia's long-term economic and financial stability has led international investment funds to show interest in the country. However, the $2 billion corporate bond volume is still relatively small by international standards.

Besides increasing volume, the Armenian market can become more attractive if our country achieves an investment-grade international credit rating. Currently, according to the "Big Three" international rating agencies (Fitch, Moody's, and S&P), our rating is two to three notches below investment grade. Reaching that level would make us even more appealing to global investors.

To what extent are our consumers familiar with these investment opportunities?

The investment culture in Armenia is developing, though slowly. There was a time when investing was simply seen as setting money aside or, at most, placing it in a bank deposit. Now, many have realized that it is essential to have diversified investments. From day one, our company has made serious efforts to promote responsible investing and raise financial literacy in Armenia.

Do you have educational programs—perhaps also online videos?

Yes, we regularly hold master classes at various universities throughout Armenia. At the Armenian State University of Economics, we renovated and furnished a modern classroom where we teach students about investment instruments, their risks, and their unique characteristics. We also have an extensive collection of free educational materials available on our website. Additionally, we produced a podcast presenting the fundamental principles of investing and created a glossary of key investment terms.

Recently, we supported the Armenian translation of one of the world's most famous books on finance for the general public: “The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness” by Morgan Housel. The book discusses how to manage money and emotional decisions.

What is particularly important to know given our current conditions?

Perhaps the fact that there are no shortcuts to getting rich quickly. If there are any, they are extremely risky. Let us remember the financial pyramids of past years where many of our citizens lost their money. Therefore, one of our goals is to explain that 300,000 AMD cannot become 1 million AMD in a month or even a year. It's a long journey that requires learning to save and avoiding aimless, impulsive purchases. This does not mean that money should be invested somewhere and forgotten. It's important to learn how to manage savings, otherwise inflation will devalue them.

What kind of internal developments did the company experience over the past year?

I can confidently say that it was another year of growth and success for Apricot Capital. The company celebrated its third anniversary and recorded growth in its client base, accessible markets, capabilities, and overall business. Our team also expanded to include specialists with international experience.

We also upgraded our technology infrastructure. In today’s world, clients want to perform every action online at high speeds, from opening an account to making investments. We have built an infrastructure that enables our clients to do so quickly and securely. A major milestone was receiving the ISO 27001 Information Security Certification. This prestigious certification requires us to undergo annual audits to continuously improve our systems and withstand new types of cyberattacks.

We have organized training sessions and IT attack simulation tests for our employees to assess their response to emergency situations. We have also been working on our mobile application, and we will share exciting updates about it in the coming year.

We expect 2026 to be an even more dynamic year of growth.

-Thanks for the interview