Volatility of Jordanian economy keeps ASE hanging
The trading volume of the Amman Stock Exchange in 2000 declined by 14 percent and the General Price Index dropped 20.5 points due to domestic and external reasons, a senior ASE official announced Monday, January 8. Abdul Rahman Touqan, chairman of the board of directors of the ASE, said that fluctuations in the Jordanian economy's growth and political instability in the region were among the reasons behind these results.
Touqan, who was speaking at a press conference, noted that the bourse had taken restructuring steps in the past year which could enhance the performance of the ASE and draw more investors to the bourse.
He said the failure of the Jordanian economy to achieve acceptable growth rates reflected negatively on the per capita income of Jordanians.
“This matter affected the savings of the citizens which in turn reflected on the investments in the bourse,” Touqan added. Chief Executive Officer of the ASE Jaleel Tarif, who attended the presser, said the decline was also due to the drop in profits of the firms listed on the ASE, which declined by 30 percent.
The figures released by the Amman Stock Exchange showed that the total trading value in the past year amounted to JD334.9 million compared to JD389.5 million in 1999.
The General Price Index in the year 2000 closed at 133.1 points compared to 167.4 points in the previous year.
The market value of the shares of the companies listed on the stock market declined to JD3509.6 million compared to JD4137.7 million in 1999, or a 15.5 percent drop.
The industrial sector commanded the lion's share of the trading volume. The figures showed that the industrial sector share was JD136 million, followed by the banking, services and insurance sectors.
Touqan indicated that some positive aspects at the bourse in the past year were the increase in value of the bonds listed on the ASE, which amounted to JD131 million, and the increase of the trading volume in the primary market, which registered 80 percent of trading.
“These points could reflect positively on the investments in the market especially in these two sectors,” Touqan told reporters.
Touqan said trading on the ASE will be enhanced if Jordan Telecom (JTC) lists its shares on the bourse.
“We are exerting pressure to list the JTC on the bourse and we hope that we will succeed,” he added.
“If JTC joins the bourse, it will reflect positively on the market by attracting more foreign investors and offer more liquidity to the stock exchange,” he added.
Touqan said a major reason behind the delay for listing JTC on the bourse is the agreement between JTC and France Telecom, which last year bought 40 percent of JTC shares.
The agreement between the two sides stipulates that the firm's shares can be listed on the ASE only after two years of the agreement.
The number of firms listed on the bourse rose to 163 firms, up from 152 in 1999.
Non-Jordanian ownership in the public shareholding companies declined to 41.3 percent from 43.1 percent in the previous year. Touqan said that net investment of non-Jordanian investors declined by JD12 million, or an 11 percent drop.
Touqan said that the delay by many commercial banks to submit their quarter- and half-year results was due to the procrastination of the Central Bank of Jordan (CBJ) to approve the results of these banks.
“The CBJ usually takes some time to scrutinize the results of these banks. On many occasions it would have discussions on the provisions taken from these banks,” Touqan added.
“Disclosure is a very important element and all companies should abide by the rules because failing to do so will harm the transparency of the bourse and damage the confidence of the investors,” he added.
Touqan said that the renewal of the annual trade protocol between Jordan and Iraq will improve exports in the current year “which will enhance the performance of the many listed firms especially those who deal with Iraq.”
Tarif said that five brokerage firms were scrapped from the ASE's list while two others were added. — ( Jordan Times )
By Tareq Ayyoub
© 2001 Mena Report (www.menareport.com)