TBILISI(BPI)- The National Bank of Georgia made statements on corporate bonds issued by local companies and warned potential buyers about potential risks – in particular, the securities do not have any guarantees from the state or the National Bank, and the payment of dividends on them is completely the responsibility of the companies.
Experts negatively assessed the possible impact of these warnings on the formation of the financial market, which is at an early stage.
Most large companies, on the contrary, welcome the National Bank’s statement and consider such warnings timely and mandatory.
According to the president of Coca-Cola Bottlers Georgia Temur Chkoniya, the National Bank’s warnings are correct.
“It is natural that the National Bank makes such statements. The same attitude will be to “Coca-Cola” when we issue securities. The business offers potential customers to purchase securities, and it is up to them to make a decision, nobody forces anyone. In such a situation a potential investor should know about the existing risks, “Temur Chkonia explains.
He notes that the National Bank has its own function – to regulation the financial market, including informing citizens about possible risks. A warning is one thing, and a ban or recommendation not to buy securities is completely different.
“The financial market in Georgia is at the development stage, and has a great prospect. Its formation should benefit everyone – business, population, banks and the state”- Temur Chkonia says.
According to Irakli Iashvili, CEO at East Gate Group, the National Bank’s statement is absolutely correct and timely, because due to lack of experience and necessary information, many citizens invest money in quackery organizations and lose their savings.
“The National Bank is obliged to warn potential customers that they must assess the risks when buying securities, but everyone should understand that losses are also possible. In this case, it will concern the relationship between the two entities, and the state is not obliged to compensate anything, the National Bank should repeat this as often as possible, so that everyone understands this,” he explains.
According to the businessman, the warnings concern mostly those who buy securities with a very high profit percentage, they receive the dividends for the first 5 months and then lose the savings.
“The financial market in Georgia is very poorly developed and the main reason for this is the weakness of the economy. We have only a few companies that can issue shares and bonds, and 80% of the market depends on imports. Even the largest importer is not the category to issue securities. Our economy is not at the stage when it is worth trading stocks; the population is not ready for this either, ” Irakli Iashvili notes.
He adds that the shares are mostly bought by banks.
“Thus they regulate the money in circulation. As for the opinion that banks interfere with the development of the financial market, maybe this is so, but the main problem is the lack of demand. There will be demand – there will be supply, “the businessman says.
Iashvili believes that today the financial market of Georgia is at the stage of pawnshop loans.