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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2011
DAMASCUS SECURITIES EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Political Outlook
A reflection to Syria’s economic development
in 2010 will show a determination economy,
willing to plan and execute sustainable
progress, in its multiple dimensions. Touching
on the various aspects revolving in and around
the economy, the Syrian internal and external
mechanisms are drawing clear plans to
encourage public, private, and co-operations,
in enhancing the economic performance for
the coming years.
The public and private sectors are working on
multiple fronts to set a productive base across
Syria’s key economic drivers. Through various
mechanisms as fiscal, monetary, social, and
technological policies, decision makers at
different levels are tackling the progress of
investment frameworks, business
environments, trade agreements and political
relations.
Economic performance
On a country-wide level, Syria’s economy in
2010 indicated an expected 5% real GDP
growth, with an additional 0.5% increase
through 2011, as per the International
Monetary Fund (IMF). Projected indicators had
shown nominal GDP standing at 59.6 billion
USD at end of 2010, with an expected
increase of 6.6 billion USD throughout 2011, to
reach a total 66 billion USD.
Meanwhile, the consumer price level remained
at a moderate 5% and is expected to remain
as is through 2011. Unemployment continued
to show concern as it stood at almost 11%.
Furthermore, the overall fiscal deficit is
expected at 2.6 billion USD for 2010,
accounting for a smaller share of GDP
compared to 2009, namely 4.3% versus 5.4%,
respectively. The higher revenue in oil
revenues and reduction in fuel subsidies were
the main drivers to fiscal adjustments.
Moreover, the government budget is expecting
a spending of 17.8 billion USD, representing a
12% rise that is mostly represented by
investment expenditures.
The Oil & Gas sector, and despite an average
decline of 4.1% per annum in oil GDP’s real
growth, the oil sector was estimated to grow
0.2% in real terms during 2010. This growth
remains small despite government efforts to
attract foreign investments for new exploration
and production. Nevertheless, crude oil
production has risen 3.1% yearly on average,
reaching 387,357 barrels per day in the third
quarter of 2010. The production at new and
smaller fields outweighs the dwindling
productions of mature sites; however, this is
only a temporary situation. Meanwhile, gas
production is on a priority list as multiple co
operations are in the pipeline to increase
production and export lines with strategic
trade partners.
The Construction & Real Estate sector has
attracted huge attention on the economic
map. The lack of supply, low real interest
rates, lack of proper investment opportunities,
and rising cash flows from Gulf investors and
Iraqi immigrants have all contributed to a
sharp increase in the price of real estate
properties. Consequently, major developers
have taken initiative to build large commercial
and residential spaces in both urban and rural
areas. Accordingly, the trend has reversed with
light price adjustments in the last eighteen
months.
The Trade & Services sector marked strong
activity through 2010. The number of visitors
reached 6.6 million through September, noting
an increase of 46% year-on-year. Tourist
expenditures reached 6.5 billion USD within
the abovementioned period, and the industry
as a whole contributed to 5.2% of GDP. In
addition, the telecom sub-sector has been run
by two large operators that have contributed to
a 42% in mobile subscribers, while the landline
network increased subscribers by 6.6% as of
end 2009. Currently, six companies are
bidding to take a pie of the sector’s success
that is about to accommodate a third operator.
The Financial sector has witnessed various
incentives in attracting funds and increasing
lending volumes. In spite of the effects of the
crisis on remittances and FDI, the Syrian
financial sector has been supported by lower
reserve requirements, lower interest rates, and
increased credit exposure limits. The money
supply expanded 12% year-on-year in July
2010, and has moved in line with GDP growth.
The last quarter of 2010 saw the first sale of
government bonds. While the financial sector
has made an outstanding growth in terms of
assets, deposits, and credit, the financial
community awaits the introduction of more
financial instruments and better allocation
mechanisms to the sector’s excess liquidity.
The Syrian capital market currently stands at
an average daily trading value of 43 million SP
and an average daily trading volume of 34
thousand shares. The market index posted an
approximate 71.9% gain in 2010. It is currently
composed of 20 companies listed within 5
sectors, namely, Banking, Insurance, Service,
Industrial, and Agricultural. The Banking sector
holds the highest market capitalization at 131
billion SP, out of a total 144 billion SP. The
market is currently receiving coverage by 12
financial brokerage companies.
In retrospect, the Syrian economy in 2010
continued to show strength through multiple
key sectors. Despite multiple drawbacks
resulting from a world crisis recovery, regional
slowdown in investments, and difficulties of
moving into an open market economy, the
Syrian economy and its key decision- makers
are showing resilience in creating stability and
progress in increasing the performance of
internal & external economic indicators.
Looking forward onto the development 7
execution of Syria’s 5-year plan, the targets set
for infrastructure and investment planning are
providing solid confidence for local, regional,
and international participants.
Information obtained from the Exchange.
Key Information Contacts
Damascus Securities Exchange www.dse.sy
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