In a recent lecture delivered in France to managers of hedge funds and private equity funds, expert Dr. Gil Feiler spoke about the Middle East stock exchanges. In his comments on the Jordanian bourse, the author of the EIU’s Rethinking Business Strategy for the Middle East and North Africa, said the market capitalization of the listed companies amounted to JD20.6 billion at the end of July 2010. Their book value hit JD13.6 billion while their profits reached JD579 million and the cash dividends JD577 million.
Feiler stressed that despite the shaky economic situation in Jordan the average P/E of the listed companies is still considerable higher at 25. the dividend yield stands at 2.9%.
Regarding a question on the involvement of foreign investors in the Amman bourse, Feiler replied that 49% of the investments in the market are by foreigners. Most of them invest in the banking sector, where their share amounts to 58%. In the IT sector, their share hits over 61%, but there are just 3 listed stocks there, said Feiler. The lower involvement of foreign investors appears to be in the media sector (1%).
The leading sector in terms of market capitalization is the banking sector (45% of the total market). The biggest company in this sector is the Arab Bank with a total capitalization of JD5.5 billion. The Bank captures some 27% of the total market capitalization. According to Feiler, “this is not a healthy situation”. The leading firms in term of market capitalization are: Arab Bank, Arab Potash, Housing Bank, Jordan Telecom, Jordan Phosphate Mines Co., Jordan – Kuwait Bank, Jordan Cement Factories Co., Jordan Islamic Bank, Jordanian Electric Power Company (JEPCO) and the Amman Cairo Bank. These companies control 68% of the total market capitalization.