Tornike Revishvili: Shaping an Environment Conducive for the Derivative Market is Our Present Focus
"Shaping an environment conducive for the derivative market is our present focus," remarked Tornike Revishvili, Chief Specialist of the Financial Markets Department at the National Bank.
The capital market acts as a bridge connecting entities seeking financing with those eager to invest their resources for anticipated returns. The establishment of such a market is pivotal to drive foreign investments into Georgia, simultaneously providing enhanced financial accessibility to both domestic businesses and governmental bodies.
Revishvili elucidated on the trio of challenges hindering the full-fledged development of the capital market: legislative legal barriers, the amplification of infrastructural initiatives, and a pivot towards comprehensive education.
"In collaboration with USAID, the National Bank orchestrated a series of training sessions revolving around derivatives. During this endeavor, experts from the renowned legal firm White & Case were present for a week, imparting knowledge. This exercise encompassed various stakeholders - from the financial sector, pension agencies, commercial banks, and brokerage firms to corporations and legal consultancies. Our aim was to ensure they received precise insights on the topic," explained Revishvili.
He further highlighted the complexities surrounding the evolution of the capital market, emphasizing that its trajectory is influenced by a multitude of factors. A prominent concern for businesses remains the unpredictability associated with currency and interest rate oscillations. To tackle these uncertainties and manage risks adeptly, the National Bank considers the judicious utilization of derivative instruments as paramount.
Addressing the aforementioned barriers, Revishvili confirmed that the legal impediment was effectively tackled in 2019. Presently, concerted efforts are being channeled towards fortifying the infrastructure and enhancing educational outreach.
Supplementing this, findings from USAID's economic governance program revealed specific obstacles stymieing the growth of the capital market. These include the scarcity of prominent institutional investors and an underdeveloped supply side, characterized by Georgian enterprises' unreadiness to accommodate investors. Additionally, the absence of a secondary debt market, which could transmute liabilities into investment tools, further complicates the landscape.
Challenges also emerge from the deficit of public capital instruments and a dearth of seasoned professionals. Notably, there is a pressing need to regulate real estate investment trusts and to formulate legislative frameworks, ensuring a safe and structured avenue for investor participation in investment undertakings.