What is the South Caucasus region and why is it important?

The South Caucasus refers to the area including Armenia, Azerbaijan, and Georgia, located between the Black Sea and the Caspian Sea. This region is strategically important because it serves as a vital trade and energy corridor connecting Europe and Asia. With the recent peace deal between Azerbaijan and Armenia, this area is now poised for significant economic growth and development as former conflicts are resolved and new transportation routes open up.

What is a "peace dividend" in investment terms?

A peace dividend refers to the economic benefits that emerge when a region transitions from conflict to stability. When peace is established, countries can redirect resources from military spending to economic development, attract foreign investment, rebuild infrastructure, and open trade routes. For investors, this creates opportunities in construction, energy, telecommunications, and logistics companies that play key roles in post-conflict reconstruction and economic integration.

What is the Zangezur Corridor mentioned in this investment theme?

The Zangezur Corridor is a planned transportation route that would connect Azerbaijan's mainland with its Nakhchivan exclave through southern Armenia. This corridor is a key component of the peace agreement between Azerbaijan and Armenia. When completed, it will provide a direct land connection for transportation, energy pipelines, and telecommunications infrastructure, significantly enhancing regional trade and economic integration.

How does political stability affect infrastructure investments?

Political stability is crucial for infrastructure investments, which typically require large capital outlays and long time horizons. When a region transitions from conflict to peace, the reduced risk of violence, property destruction, and political disruption makes infrastructure projects more financially viable. Companies involved in construction, energy, telecommunications, and transportation can pursue projects with greater confidence, often leading to higher returns as the newly stable region develops.

Why are Turkish companies included in this investment theme?

Turkish companies are prominently featured in this investment theme because Turkey has close cultural, linguistic, and economic ties with Azerbaijan and plays a significant role in regional diplomacy. As the South Caucasus opens up for development, Turkish firms are well-positioned to secure contracts and partnerships for infrastructure projects, telecommunications services, and trade opportunities due to their geographic proximity, established business relationships, and political connections in the region.

15 handpicked stocks

Caucasus Peace Dividend

This carefully selected group of stocks captures the economic opportunity created by the historic peace deal between Azerbaijan and Armenia. Handpicked by professional analysts, these companies are positioned to benefit from the new wave of trade, energy development, and infrastructure projects in a region moving from conflict to cooperation.

Han Tan | Market Analyst

Updated 2 days ago | Published at juillet 14