YEREVAN, March 9. /ARKA/. Capital market is underdeveloped in Armenia, and substantial work is needed to put things right, Erik Berglöf, chief economist at European Bank for Reconstruction and Development said Wednesday while presenting the European Bank’s report on transition process in 2010.

He views this as a quite serious challenge. He said the capital market can’t develop properly until macroeconomic environment becomes stable.

The expert said that attention rather should be paid to government bond market than corporate bond market.

He recommended Armenia to take into consideration those solutions proposed in other countries, particularly in Asian bond market.

Berglöf also said that high interest rates show low predictability in macroeconomic environment.

According to the information received from NASDAQ OMX Armenia Stock Exchange, trading in government bond market doubled in 2010 to AMD 5.6 billion as that in corporate bond market shrank by 70% to AMD 2.8 billion from AMD 10 billion in 2009.-0----