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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2005
AMMAN STOCK EXCHANGE
Jalil Tarif
Chief Executive Officer
The Amman Stock Exchange (ASE)
performance during the first half of 2005 was
outstanding. The ASE price index closed at
7375 point at the end of June 2005, an
increase of 74% compared with 2004
closing. The ASE market value increased by
US$ 14.4 billion or by 78% compared with
the end of 2004, reaching JD 32.7 billion;
and representing 303% of the GDP. Trading
volume reached US$ 9.6 billion, an increase
of 350%, compared with the same period of
2004. The daily average number of
transactions reached about 8.9 thousand;
totaling 1.1 million during the first half of
2005, an increase of 119% over the same
period of last year. Finally, the turnover ratio
has doubled over the first six months to
reach 51.0%, compared with 25.5% for the
same period of year 2004.
The ASE will introduce a new sectoral
classification for the listed companies at the
ASE. The new classification is in line with the
classification adopted by Standard & Poor’s
and will contain three main sectors and 23
sub-sectors. As a result of this new
classification; the ASE has revised its main
indicators and statistics based on the new
classification and recalculated these figures
for the period 2002-2005.
HISTORY AND DEVELOPMENT
The Amman Stock Exchange (ASE) was
established in March 1999 as a non-profit,
private institution with administrative and
financial autonomy. It is authorized to
function as an exchange for the trading of
securities. The Exchange is governed by a
seven-member board of directors. An
executive manager oversees day-to-day
responsibilities and reports to the board.
The ASE membership is comprised of
Jordan’s 30 brokerage firms.
The history of securities trading in Jordan
traces its origins back to the 1930s. In 1976,
the Amman Financial Market was
established to create a regulated trading
market. More recently, as part of Jordan’s
move to upgrade its capital market, a new
Securities Law was enacted in 1997
separating the supervisory and legislative
roles from those of exchange operations.
As a result, the Jordan Securities
Commission (JSC) was created at the same
time as the ASE and the Securities
Depository Center (SDC) were established.
The JSC supervises the issuance of and
trading in securities and monitors and
regulates the market. The SDC oversees
clearing and settlement and maintains
ownership records.
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ASE's price index up by 74% in 2005 and
reached its all time high.
In order to reflect the market in a better way,
the ASE constructed a new price index
weighted by free float shares. This index
based on Dow Jones & STOXX
methodology. This index was given a base of
1000 points as of 2002 closing. The ASE
also introduced sub indices for the three
main sectors and the 23 sub-sectors.
During 2005, the ASE has organized a
number of training courses for financial
brokers in cooperation with the Jordan
Securities Commission. These courses aim
to provide the necessary qualified human
resources in view of the Jordanian capital
market’s needs for the recent increasing
demands on the licensed financial brokers.
The ASE also, continues developing its ways
of dissemination on line information. In this
regard, the ASE has launched its new
website in the beginning of this year at
www.exchange.jo, which won the Award of
the Best Financial Website in Jordan at the
Regional Website and Information
Technology Exhibition (WEBEX 2005) held in
Amman last May. The website, with its new
theme and layout, provides on-line market
depth, the company guide, and the ASE
circulars and companies’ disclosures. In
To provide a transparent and efficient
market, the ASE implemented internationally
recognized directives regarding market
divisions and listing criteria. It also adopted
procedures for improving regulatory
effectiveness.
On 26 March 2000 the ASE launched an
automated order-driven Electronic Trading
System. The new system is in compliance
with international standards and takes into
account the G-30 recommendations. This
system also offers brokers immediate
access to stock prices and orders and
enables members to trade remotely.
addition to a number of added features of
interest to investors. The ASE also signed
two agreements; one with local company to
broadcast on-line trading data through
mobile phones by SMS, and the other with
other local company to broadcast on line
market information via the internet.
In line with its keen interest in upgrading the
services it provides to its members to ensure
efficient, rapid and fair information access,
the ASE adopted new systems on its Intranet
Domino.doc. The new system enables the
ASE members to access their trading reports
and many other available documents in an
efficient way, thus saving time and effort of
the ASE members and any interested party
that would like to access the market
information.
Finally, the ASE enhanced its cooperation
with the local, Arab and international
institutions. In this regard; the ASE
participated and attended a number of
conferences, meetings and exhibitions
locally and abroad. It also has received a
large number of visitors and delegations
from inside and outside the country.
FUTURE OUTLOOK
During 2005 the ASE will:
• apply for a full membership in the World
Federation of Exchanges (WFE);
• upgrade the technical infrastructure;
namely; the electronic trading system, the
Wide Area Network (WAN) to accommodate
projects in the fields of surveillance systems
and automating communication with
brokers, issuers and the disaster recovery
site;
• implement new sectoral distribution, which
will be consistent with international
standards;
• improve information dissemination by
introducing new retail products;
• introduce and publish a new price index,
which is a free float weighted index that was
tested during 2003 and 2004; and
• redesign all publications and bulletins,
while concentrating on the monthly statistical
bulletin and the companies’ guide.