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Pension Capital is One of the Key Sources for Developing Securities Market

Pension capital is one of the key sources for the securities market development, Giorgi Bachiashvili, head of Co-investment Fund and Member of Stock Exchange Supervisory Board, told reporters.

Pensions system reformation will stimulate the capital market development in the country, however, pension funds should be diversified to ensure protection of private savings, Bachiashvili said.

“For the purpose of securities market development, several components are required: securities should be directed to the stock exchange. Issuing bodies and capital resources should exist in the country and these resources should be reflected into securities.

Experience of a major part of countries proves that pension capital is one of the key sources for the securities market development. Naturally, there are many other components, but in Georgia this will be one of the stimulus that will drive the capital market development.

Private savings in Georgia are very small, while larger amounts are required for making investments in securities and investment institutions, private money and savings may be similar sources. Private money resources are comparatively smaller and these funds are mainly directed to private objectives or development of companies.

Consequently, pension capital is an alternative source for financing. However, only part of these funds should be directed to the market and they should be diversified, including on foreign markets to ensure safety of these funds”, Giorgi Bachiashvili said.