On the issue of investment analysis of the securities market (ფასიანი ქაღალდების ბაზრის საინვესტიციო ანალიზის საკითხისათვის)
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Date
2021
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Ivane Javakhishvili Tbilisi State University Press
Abstract
The development of the securities market is associated with the country’s
investment climate, which is determined by the investment potential and the
level of investment risk. Increased investment in the economy – is a vital task for
Georgia, at the same time, the potential for savings by the population is small due to low incomes. At the same time, the population does not trust the institutions
of the stock market, therefore, saving money is a big part of the savings (the
instrument of collection is the US dollar).
Due to the specifics of the Georgian securities market, the variety of
investment is limited, improper development of the corporate securities market,
low liquidity and guarantees of joint stock companies.
The role of the regulator represented by the National Bank is not
homogeneous. The refinancing rate does not ensure the redistribution of funds in
the real sector of the economy; it plays a regulatory role in the level of interaction
between various sectors of the financial market (the interbank lending market,
the foreign exchange market and the government securities market).
It is a fact that during the period when the regulator of the securities market
was not the National Bank of Georgia, but the National Securities Commission,
the stock industry developed in an upward direction, and the progress achieved in
this direction was noticeable - activity on the Georgian Stock Exchange, activities
of brokerage companies. By now, significant steps have been taken to develop
the securities market. Some of them, such as the creation of the GSSS system,
the entry into the country of the International Central Securities Depository,
which we talked about, these measures also include the issuance of securities
denominated in Gel by international financial institutions, amendments to the
Tax Code, this includes tax breaks related to the taxation of credit and equity
financial instruments. Interestingly, for the first time in Georgia, depository
certificates were issued, the National Bank of Georgia receives securities in Gel
to ensure monetary transactions. The issuers are EBRD, ADB, IFC, FMO, BSTDB, as
well as Georgian issuers, which have been assigned the lowest rating among the
publicly available ratings from leading international rating agencies (Fitch, S&P,
Moody’s, Scope Ratings).
Our recommendation is to eliminate the asymmetry between the banking
sector, which holds a dominant position, and the stock market on the basis of
further improvement of the legislation, among them, the restoration of a record
in the securities market in the law, according to which public securities can
only be traded on the stock exchange, As well as further improvement of the
infrastructure of the securities market.
Description
• Gogokhia M. (2008). Sabanko saqme. [Banking, Tbilisi]. in Georgian.
• Iakimkin V.N. (2002). Segmentatsia finansovogo rinka. [[Segmentation of Financial
Market, Moscow]. in Russian.
• Krugman P. (1999). ,,We are not the World” in the set of essays – The Accidental
Theorist and other Dispatches from the Dismal Science, Penguin Books.
• Mikhailenko M.N. (2019). Rinok tsennikh bumag. [Securities Market, Moscow]. in
Russian.
• Mishkin F.S. (2006). Ekonomicheskaia teoria deneg, bankovskogo dela i finansovikh
rinkov. Moskva [The Economics of Money, Banking and Financial Markets,
Moscow-St. Petersburg-Kiev.] in Russian.
• Qoqiauri L., Shonia N. (2008). Fasiani qagaldebis bazari. [Securities Market, Tbilisi].
in Georgian.
• ismworld.org
• nbg.gov.ge
• spglobal.com
Laws and Normative Acts:
• Law of Georgia N1745-IIs (1998). ,,About Securities Market”, Tbilisi, 24 December.
• Law of Georgia N68-05-rs (2020). ,,About Investment Funds”, Tbilisi, 14 July.
Keywords
Securities market, investment portfolio, “confidence indices”, institutional investors
Citation
Economics and Business, №3, 2021, pp. 118-126