Amman Stock Exchange (ASE) Elected as chairman of the Working Committee of FEAS
Securing a two-thirds majority, the ASE assumed the chairmanship of the Working Committee of FEAS during last week's Committee meeting in Istanbul. The ASE was represented at the meeting by Mr. Nader Azar the Deputy CEO, and Mr. Sami Hattab the head of the Research and International Relations Department.
This came in the wake of dissolving and restructuring three committees, namely the Regulations and Instructions Committee, the IT Committee and the Marketing Committee. A working group was set up to study and regulate the restructuring process, which culminated in a single Working Committee for FEAS as a whole, to be in charge of all legislative, regulatory, technical and marketing issues.
The ASE is an active member at FEAS and takes part meticulously in the annual general assembly meetings and in meetings of the working committees. The ASE headed the IT Committee and continuously participates in the various technical and training programs. This election will have positive impact by promoting its role within FEAS and regional and international arena.
Jordan was one of the founding members of FEAS in 1995, and has assumed the position of a vice president for several years. At present, FEAS counts some 27 financial markets from Europe and Asia amongst its membership, with market capitalization of more than $250 billion. Some of the important member markets in the region are Turkey, Pakistan, Iran, and several European markets. Some of its Arab member markets are Egypt, Oman and Palestine.
ASE Price Index Sample for 2005
The ASE has revised its share price index sample to reflect developments in the activities of listed companies. This end-of-year revision aims at making the index representative of changes to share prices . Through the implementation of approved criteria, such as market capitalization, number of trading days, number of transaction, trading volume and number of traded shares per company, eight companies were replaced, and the sample as a whole made up 86% of the total market capitalization, 86% of the trading volume and 75% of the number of traded shares on ASE. Its worth to be mentioned, Jordan Telecom Company has been added to the index sample, which can be found on the ASE website.
Corporate Finance Workshop
The ASE Participated in the Corporate Finance Workshop learning about the benefits of company financing through corporate bonds. This training came as part of an overall effort to develop Jordan's Fixed Income Market. The workshop was conducted by the Jordan Securities Commission (JSC) in cooperation with the USAID-funded AMIR Program. More than 100 finance professionals from 50 Jordanian firms, banks and representative of regulatory commissions in Jordan.
Mr. Jalil Tarif the CEO of the ASE gave a presentation in this workshop on Bonds Listing at the ASE. He explained the basic conditions of listing any bond in the ASE also the conditions that the bond's issuer must fulfill pre-listing the bonds. Also he went over the types of bonds listed and traded at the ASE as well as the bonds market activity and value compared to the equity market. In his presentation, he tackled the reasons of the weakness of bonds market in Jordan. During the workshop
sessions senior financial U.S. instructors with extensive experience in the Middle East, discussed utilizing bonds in corporate financing strategies to reduce reliance on short-term borrowing, lowering interest expense fees, and employing alternative sources of financing to maximize the price of company stock.
The ASE Develops it Intranet
The ASE has recently implemented Lotus Domino.doc on its Intranet, a content management product. Under Domino, the ASE will replace the current system of distributing documents to brokers through internal email. All documents including broker activity reports, disclosures, corporate filings, and ASE bulletins are all placed under clear binders corresponding to their categories. This means that brokers no longer need to keep and archive documents in their own computers and filing cabinets as the ASE is implementing a full archive of documents for the whole market. It is expected that this project will lower the cost of brokers and the ASE in paper and printing cost savings. In addition, this project will enable a more efficient market where information can be resorted to in an easy and quick manner. In order to increase collaboration between the ASE Surveillance Team and brokers, another product called Same time has been implemented that allows online communication and broadcast between the different users of the Intranet. This allows surveillance to directly communicate with all brokers at the same time.
Launching a New Website for the ASE
In line with its policy of continuous development of its services to investors and capital market participants, and in belief of the need to disseminate more information to all interested parties from all over the world, and in order to enable the latter to access said information easily and quickly, the ASE will soon announce the launching of its new website .
Shareholding Companies Start Handing in their Quarterly Reports to the ASE
For the first time in the history of the Jordanian capital market, companies listed on the First Market provided the ASE with quarterly reports that are reviewed by the companies' auditors in order to give said statements credibility and confidence, and in pursuance of Article 15 (b) of the Directives for Listing Securities on the ASE, which became operative as of the beginning of last July. The Directives oblige companies listed on the First Market to hand in such reviewed quarterly reports within one month of the end of the relevant quarter to enhance transparency and disclosure in the Jordanian capital market, by providing information to investors on the performance of companies to help the latter in making their investment decisions. The ASE chose companies listed on the First Market as a first step in preparation for generalizing this request to all companies listed on the ASE. The Listing Directives stipulate for strict listing requirements in terms of profitability, liquidity, free float and number of shareholders for companies to be listed on the First Market.
The ASE circulates the quarterly reports that it receives to all brokers operating on the ASE via its Intranet to enable them to inform their clients thereof; it also puts the same reports on its website (the Arabic version). The ASE announce the names of any companies that fail to abide by the set date throughout the various media, and said companies shall be liable to penalty by virtue of the Securities Law, varying from warning and fines to delisting.
The ASE Participates in the International Capital Markets Conference
A delegation represented the ASE in the International Capital Markets Conference, which took place in Greece last September. Thesseloniki Stock Exchange Center undertook the main part in organizing this conference. This year conference provided the participants with the opportunity to expertise on a variety of topics that range from regional cooperation to clearance and settlement problems and also included short country's presentations.
Performance of Public Shareholding Companies during the first half of 2004
Semi-annual results of public shareholding companies listed at the ASE for the first six months of 2004 show a significant improvement in performance across sectors as compared to the same period of last year. 155 public shareholding companies representing 97% of the ASE market capitalization have filed their semi-annual reports and their figures indicated a growth in net pre-tax profits of 118.2% compared to the same period of last year. Pre-tax for insurance companies increased to JD2.1 million against losses amounted JD0.9 million for the same period last year. Semi-annul profits of the services sector grew by 109.0% reaching JD64.5 million against JD30.8 million for the same period of last year, the industrial sector by 58.8% standing at JD60.1 million against JD37.8 million, and the banking sector by 32.0% reaching JoD175.8 million, against JD133.1 million for the same period of last year. Total assets of said companies went up by 7.4%, amounting to JD32.7 billion, against JD30.4 billion by end of last year. Net shareholders' equity of said companies also rose by 7.6%, reaching JD4.1 billion, against JD3.8 billion by end of last year.
The ASE New Internal Directives and By-laws
The ASE issued its new Internal directives and by-laws with the JSC approval in accordance with the Securities Law No. 76 of the year 2002, which stated that the ASE had to amend its situation according to its provisions. The by-laws are: Regulations for Fees and Commissions, Disclosure Regulations, Instructions of Dispute Settlement, and other internal administrative and financial by-laws.
Amman Stock Exchange (ASE) as Affiliate member of the (WFE), the CEO of the ASE said in a press release.
In his notification letter to the CEO of the Amman Stock Exchange, the Secretary General of the WFE stated that "The decision was taken to recognize the progress that has been made in the business development of Amman Stock Exchange exchange". The WFE Secretary General added that the ASE continues to deepen its local significance in the Jordanian economy". Mr. Tarif noted that "Membership of the World Federation of Exchanges is a criterion for many national regulators and asset management institutions to allow privileged access for investment.Membership of the (WFE) identifies an exchange as having assumed the commitment to prescribed business standards, recognized as such by members, owners, and users of exchanges, as well as by regulators and supervisory bodies". The World Federation of Exchanges, formerly the International Federation of Stock Exchanges (FIBV), is the trade organization for regulated securities and derivative markets, settlement institutions and related clearing houses, and their diverse services to capital markets. WFE membership currently encompasses 54 exchanges from all over the world. Members together account for over 97 % of world stock market capitalisation, and most of its exchange-traded futures, options, listed investment funds, and bonds. The combined market capitalization of the WFE members is approximately $35 trillion USD.
The ASE has experienced significant developments recent years supported by technical assistance provided by (USAID)-funded AMIR Program and other international institutions.
The New Listing Rules
As of beginning of July, the ASE started applying the new Listing of Securities at the ASE Directives for the year 2004, issued in pursuance with Article 72 of the Securities Law no. 76 for the year 2002, which were approved by the Board of Commissioners of the JSC. These Directives introduced new concepts and a progressive approach, in compliance with international standards in terms of market divisions and listing requirements. Trading of public shareholding company shares are thus divided into two markets at the ASE, according to shareholders equity, free float, profitability, number of shareholders and liquidity and disclosure criteria. Within this framework, companies whose shares can be traded on the First Market are those where the shareholder equity is not less than the paid-up capital, that have made net pre-tax profits over at least two consecutive years out of the last three years, whose share turnover ratio within the last twelve months is not less than 10% of their free float, and whose trading days do not fall short of 20% of the total trading days during that period. The new Directives also stipulated that the number of shareholders of a company listed on the First Market be not less than 100, its free float not less than 5% of the company shares if its capital is more than JD50 million, and not less than 10% if its capital is less than JD50 million. Continuous listing requirements were introduced in these Directives for the first time, whereby a company listed on the First Market must maintain the listing requirements throughout its existence on that market.
Company shares can be transferred to the Second Market if the company fails to meet any of the conditions that put it on the First Market. Also and for the first time, companies listed on the First Market would be obliged to provide the ASE with a quarterly report audited by its auditor as well as bi-annual and annual reports. The ASE has now the power to impose penalties on issuers of securities listed on the ASE if they do not respect the provisions of the Listing Directives and ASE decisions in relation thereto. Such penalties vary from warning to delisting. And listed below the names of the companies which transferred from market to another:
The companies that were listed in the second market and transferd to the first market:
Arabian Seas Insurance
Al-Bilad Medical Services
Vehicles Owners Federation
Machinery Equip. Renting & Maintenance
Union Investment Corporation
Union Land Development Corp.
Al-Tajamouat for Catering & Housing
Al-Sharq Investments Projects
Arab Real Estate Development
Al- Amin for Investment
Rum Aladdin Industries
International Ceramic Industries
Pearl Sanitary Paper
The companies that were listed in the first market and transferd to the second market:
Jordan Commercial Bank
Holy Land Insurance
Arab Orient Insurance
The National Ahlia Insurance
Arab International Hotels
Jordanian Duty Free Shops
Arab Inter. for Investment & Education
Zara Investment (Holding)
United for Financial Investment
Jordan International Trading Center
The Industrial Commercial & Agricultural
The companies that were traded in the third market and transferd to the second market:
Arab American Insurance
Middle East For Development & Trade
Trust International Transport
Jordan Loan Guarantee Corporation
Arab Press Work
Specialized Trading and Investment
Jordan Investment and Tourism Transport (Alfa)
Petra Tourist Transport
Amman for Development & Investment
Investments and Integrated Industries
Jordan Projects for Tourism Development
Intermediate Petro-Chemical Industries
Ad -Dulayl Industrial Park
Arab Food and Medical Appliances
Nayazk Dies Manufacturing
General Engineering Industries
United Textile Group
Jordan Safi Salt
Middle East International Investment Group
Jordan Tobacco & Cigarettes
Floating the opening price of several companies
The ASE Board has approved the cases where the ASE shall float the opening price of a given company; such cases include capital restructuring, all company mergers, first listing, no-trading on a certain company shares for more than six months, and suspension of a certain company shares for more than three months for any reason.
Accordingly, the CEO of the ASE has taken the decision to float the share price of the following companies:
Jordan Himmeh Mineral
Jordan Investment Trust
Jordan Loan Guarantee Corporation
Century Investment Group
Arab Engineering Industries
Approval of trading on the basis of a single security unit with multiplications
The ASE Board has decided that trading on the ASE shall be on the basis of a single security unit and its multiplications, with the exception of the Arab Bank Company securities where trading shall be on the basis of 20-shares unit and multiplications. This decision was taken in accordance with the provisions of Article 28 of the operative Trading Instructions. By the same token, and in accordance with Article 29 of the said Instructions, the minimum value for the market value of a single contract shall be 200 thousand Jordan dinars for it to be considered a deal. Other decisions were related to other issues such as limiting the time for holding the records of taped telephone conversations between brokers and ASE monitoring staff to one week, in accordance with Article 37 of the Trading Instructions, and adopting the ETS User's Manual in accordance with Article 40 of said Instructions.
Investment and Marketing Reality Conference
Mr. Mansoor Haddadin, the vice-chairman of the ASE, and Mr. Jalil Tarif, the CEO received participants in the conference on "Investment and Marketing Reality for Arab Business Women in the IT Age" organized by the Jordan Forum for Business and Professional Women. The purpose of this visit was to introduce participants to the Jordanian capital market in general and the ASE in particular. Mr. Tarif also gave a lecture at the conference, entitled "ICT Development in the Jordan Capital Market", whereby he gave a brief overview of the development of the capital market in Jordan, starting with the establishment of the Amman Financial Market in 1978, passing through the restructuring in 1997 which led to the creation of the three capital market institutions, namely the Jordan Securities Commission (JSC), the ASE and the Securities Depository Center (SDC). He underscored the huge progress made in the ICT sector in Jordan, flourishing under the support of his Majesty King Abdullah the II. The technological leaps made by the Jordanian capital market were marked by the adoption of a state-of-the-art electronic trading system (ETS), which boosted the efficiency and speed of trading in securities with more transparency and security for participants and investors, and the implementation of remote trading (RT) which gave brokerage firms and market participants more flexibility and ease. The ASE further developed its infrastructure by installing the Wide Area Network, operating an advanced Management Information System (MIS) and setting up an Intranet. Mr. Tarif also went over the steps taken by the ASE to make information available to investors both inside and outside Jordan as well as to all concerned parties.
Royal Defense Academy Visits Capital Market Institutions
A delegation from the Royal Defense Academy paid a visit to the capital market institutions, during which they were briefed on the mechanism of work of the institutions, the electronic systems and work procedures of the ASE, the latest legislative and technical developments and achievements made at the ASE over the recent years as well as investment opportunities. Mr. Tarif made a presentation on the latest developments on the Jordanian capital market and stock exchange, and the delegation expressed its admiration of the impressive progress made by the ASE since its inception.
Jordanian Parliament Visits Jordan Capital Institutions
The Financial and Economic Committee of the Jordanian Parliament headed by Dr. Hashem Dabbas were received at the JSC headquarters by its Chairman, Dr. Bassam Saket, along with members of the Board of Commissioners, Mr. Nader Azar, Deputy CEO of the ASE, and the deputy CEO of the SDC. After welcoming the guests, Dr. Saket gave a short presentation on the development of the national capital market, indicating the various aspects of technical, professional and legislative market improvements. He pointed out the similarities in the role of the JSC as a supervisor and that of the Parliament's checks and balances, with the aim of insuring the best policies for the advancement and the protection of the country, citizens and investors. Mr. Azar followed suit and went over the most significant technical and legislative steps made at the ASE, noting in particular the ETS, RT and MIS, the efforts made in the field of information dissemination and investor awareness in the culture of securities investment, as well as the exceptional performance of the ASE over the recent years.
The French Ambassador Visits the JSC and the ASE
H.E. Mr. Jean Michel Kazar, the French ambassador to Jordan paid a visit to the JSC whereby he was met by Dr. Saket and other members of the Board of Commissioners. Venues of cooperation in the field of upgrading the electronic systems at the capital market according to international standards were discussed. At the ASE, Mr. Tarif briefed the ambassador of the latest legislative and technical developments and ASE achievements and investment opportunities. It is to be recalled that the French government has contributed to the development of the Jordanian capital market by supplying the French ETS which is applied in Paris Bourse and a large number of world exchanges. It entered into operation in the year 2000 and enabled shifting from manual to electronic trading, thus improving efficiency, accuracy and speed of trading and enhancing supervision and transparency.
Visit of Kuwait Stock Exchange Delegation
Mr. Tarif received a visiting delegation from the Kuwait Stock Exchange, composed of Mr. Adbel-Hakin Fuleij, head of Public Relations, Mr. Mousa Kandari, Director of Finance, and Mr. Jamal Rashid, Director of Legal Affairs. The delegation took note of the latest legislative and technical developments of the ASE, the most recent achievements and mechanism of work within the various departments of the ASE. They also toured the Investors' Gallery and the various ASE facilities and departments.
The New Trading Directives
As of beginning of June, the ASE shall start applying the new Trading of Securities at the ASE Directives, issued in pursuance with Article 67(c) of the Securities Law no. 76 for the year 2002, which were recently approved. These Directives include a number of ethical issues that brokerage firms must abide by in their relations with their clients. Serving the client's interests and fair treatment are among the new directives, whereby brokerage firms would have to take all the necessary measures to protect the rights of their clients, and not to undertake any act that aims at giving misleading or inaccurate information about the price, volume of trading or activity of any security in a way that would impact the interplay of supply and demand on the said security. Moreover, the new Directives oblige brokerage firms to maintain buying and selling authorizations in sequence, whereby said authorizations are subject to ASE surveillance. Furthermore, the Directives empower the ASE to amend the closing price of any security if it transpires that the execution price of the last trading was aimed at influencing the closing price of said security and giving a misleading image about it, so that the last closing price would become that at which the last transaction was executed in a manner that does not run counter to applicable legislation, all with a view to enhancing transparency in security trading at the ASE.
For the first time, the new Directives allow for denomination of securities in other than the Jordanian currency, which means that securities issued in a currency other the Jordanian Dinar can be traded on the ASE now. Brokerage firms can also execute sales and buys for their clients upon authorizations given electronically, via email. Items related to the operation of the Electronic Trading System were taken out into a separate ETS User Guide. The current trading directives shall be repealed as of the date of implementation of the new above-mentioned Directives.
It is worth mentioning that the ASE has started electronic trading as of 2000, and allows companies to conduct remote trading, whereby all companies are connected through a Fiber Optics and leased lines. Last year, more than 448 thousand contracts were executed through the ETS, namely an increase of 75.3% over the previous year. This year, the number of executed contracts amounted to about 377 thousand, i.e. 81.8% more than the number of executed contracts during the same period last year. Trading volumes broke records, sky rocketing to JD1.25 billion during the elapsed period of this year, with 246% increase over the same period of last year.
The Executive Manager of the ASE Mr. Tarif met with the IMF delegation to Jordan headed by Mr. Ihsan Mansour. Mr. Tarif briefed the delegation on the legislative, technical and quantitative developments that the ASE went through over the last few years and ASE achievements. The delegation went on a tour that included the ASE building.
WAIPA Study Tour Visit
A delegation from the World Association of Investment Promotion Agencies (WAIPA) consist of member agencies from different countries visited the ASE along with other economic and financial institutions in Jordan in a study tour. This visit organized by the Jordan Investment Board. Mr. Jalil Tarif the Executive Manager of the ASE briefed the delegation on the legislative, technical and quantitative developments that the ASE went through over the last few years, the ASE achievements and the investment opportunities in Jordan's capital Market.
Forum at Al Al-Bayt University
The ASE participated in the second scientific forum organized by Al Al-Bayt University. Mr. Jali Tarif represented the ASE in the forum by giving a lecture " Developments of the Capital Markets of Jordan" were he explained the legislative and technical developments in the capital market in general, and the achievements of the ASE in the field of information dissemination and boosting confidence in investment in securities in particular. Along the sidelines, the ASE had a booth demonstrated how the ASE operates; also the ASE brochures have been distributed. It is to mention that the ASE is one of the main sponsors of this forum.
Syrian Delegation Visit
The Executive Manager of the ASE Mr. Tarif received a delegation of Syrian EMBA students from the Higher Institute of Business Administration. The delegation was on the legislative, technical and quantitative developments that the ASE went through over the last few years and ASE achievements in the field of information dissemination.
IOSCO annual conference
Under Royal patronage and with the organization of the Jordan Securities Commission (JSC) and the other capital market institutions in Jordan, the 2004 annual conference of the International Organization of Securities Commission (IOSCO) will be held in Amman on May 17- 20 of this year. More than 500 participants from more than 100 countries from all over the world are expected to attend this event which is held for the very first time in an Arab country.
The agenda of the program has a part reserved for members only and this is related to the meetings of the five working committees in addition to the Emerging Markets Committee and the Self Regulatory Organizations (SRO) Consultative Committee. The other part is public panels on some of the most important topics related to financial markets, such as challenges to the regulation of CIS, international convergence and public oversight of accounting and auditing standards, recent evolution in securities industry mechanisms, mergers, demutualization and governance of securities exchanges.
The cultural side of Jordan is highlighted in the program of varieties arranged by the JSC to introduce participating delegations to the most salient features and developments related to the Jordanian culture and civilization.
IOSCO is an international body that comprises capital market supervisors and some stock exchanges as members, in addition to the IMF and some various financial and monetary institutions. It drafts international standards to secure capital market efficiency, and the exchange of information and expertise among the various bodies for the purposes of developing domestic financial markets, and legislating and enhancing effective supervision on international securities transactions. It is to be noted that the ASE, by joining IOSCO as an associate member, has become the first Arab stock exchange to join this international body.
London Mayor visits the capital market institutions
Lord Durman Rober Finch, the Lord Mayor of London, H.E. Mr. Christopher Prince, the British ambassador to Jordan and the accompanying delegation visited the Jordanian capital market and were received at the headquarters by Dr. Bassam Saket, chairman of the JSC, members of the JSC Board of Commissioners, as well as Mr. Jalil Tarif, the Executive Manager of the ASE. Dr. Saket commended the guest and his delegation and thanked them for their interest in the Jordanian capital market. He also expressed Jordan's keen interest in bolstering its relations with developed countries and markets, with the stock exchange of London and its financial institutions being at the lead. Gratitude and appreciation were also expressed for the assistance provided by the British government with a view to promoting the Jordanian market's standards to be in line with international ones. Dr. Saket went over the technical, professional and legislative developments introduced on the market, and underscored the importance of new investments for the Jordanian capital market in the light of unrestricted investment, lifting of foreign ownership ceilings, high market safety and return, improved JSC efficiency through training programs and activities which led to an increased investment culture, the formulation of special standards on capital market dealings, regulating disclosure, corporate governance and insider trading, risk management and sheltering the market from abuse. Mr. Tarif, in turn, made a short presentation on legislative and technical developments on the ASE in the field of information dissemination and boosting confidence in investment in securities, and reviewed market performance in 2003.
Creating a Dollar bond's market at the ASE
The ASE has introduced a new market for trading bonds issued in US dollar. It amended its listing and trading regulations in force to allow for the listing of non Jordanian Dinar securities on the ASE in order to absorb and facilitate the trading in such securities. Settlement and clearance of executed transactions on said bonds also take place in the issuance currency. Under this framework, the 600 Amman Cairo bonds with a value of six million US dollars were listed. It is worth mentioning that the value of listed bonds and corporate bonds on the ASE went beyond the billion, broken down to 65 million development bonds, 700 million treasury bonds and 101 bonds from public shareholding companies and 167 million bonds issued by public institutions.
Bahrain Stock Exchange delegation visits the ASE
Mr. Jalil Tarif received a visiting delegation from Bahrain Stock Exchange headed by its Director General Mr. Fouad Rashed; and the meeting was attended by the ASE deputy Executive Manager, Mr. Nader Azar and the heads of the ASE's departments. The delegation took stock of the latest developments on the Jordanian capital market, where they listened to a detailed presentation on the enhancement and the most salient developments of the ASE legislative and technical infrastructures, as well as progress made in the field of disclosure and data dissemination. They visited the Investors Gallery and the various facilities and departments of the ASE. This visit is part of the on-going ASE-BSE bilateral cooperation program that aims at mutual exchange of expertise and information in the service of both markets. The delegation also toured the JSC and the SDC and met with Dr. Saket. It is to be noted that the BSE was set up in 1989 to assume all roles of regulator, supervisor and executor, as an official market for trading in securities, settling and clearing transactions and performing the role of a central depository for securities. Remote trading in BSE is performed through a modern electronic trading system in place. Listed securities traded on the BSE vary between shares, bonds, investment units, Islamic securities and warrants, and the total market capitalization of the BSE amounts to around $11.1 billion.
Provence University delegation visits the ASE
A group from the International Business Administration Program of the University of Provence, France, visited the ASE under the umbrella of the cultural exchange program with the Yarmouk University. The group was briefed by the Executive Manager on the latest developments at the legislative and technical levels within the ASE, and they toured the facilities and the Investors Gallery.
Student delegations visit the ASE
The ASE received groups of students from the of Zarqa' Private University and Yarmouk University. The students were introduced to trading activities, and listened to presentations on trading mechanisms and the latest developments witnessed by the ASE.
Investor awareness program
In cooperation with Securities and Exchange Commission (SEC) and with support from AMIR program, the Jordanian capital institutions are undertaking comprehensive investor awareness programs and securities investment campaigns, with the aim of boosting and entrenching investment in the national capital market. Towards this end, the deputy chief of SEC investor awareness office visited the Jordanian capital market and met with the chairman, the commissioners and the Executive Managers of the ASE and the Securities Depository Center (SDC). The details and mechanisms for setting up such specialized programs in cooperation with the ASE and the SDC were discussed in order to attain a fair, effective, efficient and transparent market that attracts domestic and foreign investments. The Executive Manager of the ASE affirmed the need to work jointly with SEC and the JSC to create a well-informed base of investors that would play its role in attaining the ambitious economic objectives of Jordan.
ASE 5th GA
The ASE held its fifth General Assembly ordinary meeting on the 31st of March, 2004. The meeting was chaired by the Chairman of the Board, H.E. Mohammed Saleh Horani, and was attended by the Executive Manager, Mr. Jalil Tarif, as well as representatives from twenty one of the ASE members, or 70% of the total members. The minutes of the last meeting were read out and the Board report on the ASE achievements and future plans and activities was discussed. The participants also took stock of the auditor's report on ASE balance sheet, income statement and financial position and discussed its annual budget, as well as the 2003 loss and profit and cash flow statements, and the 2004 estimated budget. ASE statements showed a 24.4% revenue increase against the year 2002, and a net surplus growth of 36.5% in 2003 as compared to the previous year. The ASE has made a surplus of JD4.8 million as a total.
The ASE Internal By-law
As of beginning of April 2004, the new ASE Internal By-law entered into effect. The JSC Board of Commissioners recently approved it in accordance with the Securities Law No. 76 of the year 2002, which stated that the ASE had to amend its situation according to its provisions.
The By-law includes new provisions that lay out membership terms and conditions, information and data to be provided by companies upon filing of the membership application form, and the duties of the members vis-à-vis the ASE, foremost amongst which are the following: to submit to the ASE annual and semi-annual reports inclusive of the member's financial data, and to inform the ASE of any material changes that affect the member's financial situation upon their occurrence. Some other important changes include granting the ASE the authority to conduct an inspection of brokers and connected persons, to investigate with them and to impose sanctions on those who breach the applicable legislation. Penalties vary from warning and admonition, imposition of fines to imposition of restrictions on broker activity, and suspension of activities or termination of membership. This by-law will further activate the role of the ASE through the provision of a suitable environment that would guarantee the market interplay of supply and demand on traded securities, and would provide dealers with fair and equitable work mechanisms.
ASE Administrative Regulations
The new Administrative Regulations of the ASE have been adopted and entered into force as of the beginning of April. They introduced a set of amendments to the organizational structure and departments of the ASE, whereby a new Surveillance and Inspection Department was created in line with the Securities Law No. 76 of the year 2002, which underlined the surveillance and investor protection procedures. The trading department and the members and companies department were merged into a single Listing and Operations Department, the names of the research and external relations department and the computer department were changed to the Research and International Relations Department and the IT Department respectively.
ASE performance in the first quarter of 2004
The accumulative volume of trading on the ASE during the first quarter reached JD 1023 million, against JD155.3 million for the same period of 2002. The number of traded shares went up to 316.8, the number of executed contracts to 261 thousand, registering an increase of 241.4% and 164.9% respectively compared to the same period of last year. Market capitalization of listed companies rose to JD8.1 billion, namely a 4.4% increase against the beginning of the year, constituting 115.6% of the GDP by end of March. As for the shares prices; the general index weighted by market capitalization closing at 2728 points by end of March, a 4.3% increase as compared to the year's beginning.
Muscat delegation visits the ASE
A delegation of experts represents Muscat Stock Exchange, the Capital Market Authority and the Muscat Depository and Securities Registration Company visited the ASE, and viewed the French trading system NSC-UNIX in operation and the ASE working procedures. The delegation expressed its admiration of the impressive progress made by the ASE since its establishment. They also paid a visit to the JSC and the SDC to see their operating systems.
The ASE Fifth General Assembly
The ASE is holding its fifth ordinary General Assembly meeting by end of March. The meeting shall discuss the report presented by the Board on the ASE achievements and future plans and activities, listen to the auditor's report on the ASE balance sheet, final statements and financial position and go over its annual budget, income statement and cash flow statement for 2003. The ASE will circulate its fifth annual report in Arabic and English, once approved by the GA. The report reviews the ASE performance and achievements in 2003, and an overview of Jordanian economy's performance as well as of some Arab and international exchanges during the same year. Attached to it are a statistical appendix and the ASE final financial statements.
Student delegations visit capital market institutions
Student groups from both the University of Philadelphia and Jordan University visited capital market institutions in order to take stock of the most important developments on the capital market and the way these institutions function. During those visits, students were informed of the latest developments witnessed on the capital market as well as of the trading mechanism on the ASE.
ASE performance in 2003
The ASE put in an excellent performance in 2003 with its share price index overshooting all its previous records at 262.6 on December 23 and closing the year at 261.5 points, namely a 53.8% rise as compared to the end of 2002. This was the result of the accumulative rise in the index of all sectors in 2003, with a breakdown of 73.4% for the banking sector, 52.6% for insurance, 45.8% for the industry and 19.5% for services. A spike of 95.2% in the trading volume of trading was also noticed in 2003 with a total of JD1.86 billion, and the number of traded shares nearly doubled reaching 1.0 billion, a 118.4% rise as compared to the previous year. That was matched by an increase against the year 2002 of 75.3% in the number of executed transactions up to a total of 786.2. Share turnover ratio jumped by 81.9% with a percentage of 49.1% against 26.5% in the precedent year. It is to be noted that all these are record figures, unprecedented in the history of Amman financial market as of its inception in 1978. Market capitalization of shares listed on the ASE was around JD 7.8 billion, constituting 116.8% of the GDP, with a rise of 54.6% compared to the end of 2002. The total value of traded development bonds and corporate bonds in general verged on JD11.4 million, namely an increase of 14%. The volume of inheritance, family and public shareholding company transfers excluded from trading was about JD54.8 million, putting the volume of trading in the secondary market at JD1.92 billion, otherwise a rise of 57.1% in comparison to 2002. Shares of listed companies purchased by non-Jordanian investors totaled JD281.1 million, a 15.2% of overall trading in 2003, with 55.1% bought by Non-Arab investors, against JD199.2 million of those sold by non-Jordanians, with the Arab percentage standing at 74%. Consequently, net non-Jordanian investment realized in 2003 was about JD81.9 million, while it valued JD0.9 million in 2002.
Prime Minister visits Jordanian capital market
H.E. Faysal Al-Fayez, the Prime Minister, paid a visit to the Jordanian capital market institutions, where he met the Chairman of the Jordan Security Commission (JSC), and the Board of Commissioners, the Chairman and the Executive Manager of the ASE, the Chairman and the Executive Manager of the Securities Depository Center (SDC), and some officials of these institutions. Mr. Al-Fayez noted the importance of the JSC in developing the performance of the capital market and supervision of its operators with the aim of developing it in line with international standards and to promote investment and protect investors, developing the legislative and regulatory framework of the market, and encouraging cooperation with Arab and international regulators to help attract and increase foreign investments. He stated that the government shall continue to support the JSC in its efforts to implement law and protect investors to enhance market confidence and raise public awareness of the investment culture. Dr. Bassam Saket, the Chairman of JSC presented the latest technical, professional and legislative developments and the achievements of the JSC in the field of disclosure, transparency, and supervision on the capital market. Mr. Jalil Tarif, the Executive Manager of the ASE presented the latest developments and achievements on the ASE, including the electronic trading system.
ASE Price Index Sample for 2004
The ASE made its annual review for shares included in it index sample to ensure that the latest activities of each listed company are taken into consideration, so that the index clearly represents changes in stocks prices. The rules adopted represent the market capitalization, the number of trading days, the number of executed contracts, the trading volume, and the number of traded shares per company to compose a sample representing 90% of the ASE market capitalization, 93% of the volume of trading and 91% of the total shares traded on the ASE. The numbers of selected companies for the sample are 11 for banks, 9 for insurance, 18 for services and 32 for industry. The index sample can be accessed at the ASE website.
The ASE shall also start as of the beginning of 2004 to calculate a new price index along side other indices. It shall be weighted by the market capitalization of the free float shares, whereby each company shall have its weight according to its free float rate.