JUNE 2013 - FEAS

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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013AMMAN STOCK EXCHANGEThe ASE has continued in 2012 with itsefforts, aiming at developing the market,and increasing its efficiency.Nader AzarActing Chief Executive OfficerThe Amman Stock Exchange (ASE)managed to pass the year 2012 with astable performance in spite of the unstablepolitical situation in the surrounding countries,especially in neighboring Syria. On theeconomic level, 2012 wasn’t an easy year forJordan as well, due to multiple factors thatweighed on the budget deficit including thehuge influx of Syrians seeking refuge in Jordan,the Egyptian gas supplies that stopped for aprolonged period, and the foreign aids thatstalled. However, these economic issues easedbefore the end of the year, and the performanceof the ASE was stable as it can be noticedby the slight decline in the ASE general priceindex which went down by 1.88%. In addition,the ASE retained the confidence of investorsespecially foreign investors whose ownership inthe ASE stood at 51.7% at the end of 2012.On the other hand, the ASE continued with itsefforts in updating the technical infrastructure.And on the legislative level, the ASE appliednew Listing Securities Directives. Thesedirectives are considered a major achievementin the year 2012, and according to thesedirectives, listed companies were distributed onthree different markets instead of two, with thethird market having different trading hours andthe first market having higher fluctuation limits.The criteria that determine to which marketeach company pertains include shareholdersequity, free float of the company, profitability,company’s capital, number of shareholders,and others. As for the performance of the ASEduring 2012, the Free Float Weighted Indexwent down by 1.88% to close at 1958 pointscompared with its 2011 closing of 1995 points.The trading value reached US$ 2.8 billion andthe number of traded shares reached 2.4 billionwhile the number of transactions reached 1million. In addition, the net of non-Jordanianinvestments at the ASE showed an increase ofUS$ 53.1 million during the year 2012.HISTORY AND DEVELOPMENTThe Amman Stock Exchange (ASE) wasestablished in March 1999 as a non-profit,private institution with administrative andfinancial autonomy. It is authorized to functionas an exchange for the trading of securities.The Exchange is governed by a seven-memberboard of directors. A Chief Executive Officeroversees day-to-day responsibilities andreports to the board. The ASE membership iscomprised of Jordan’s 63 brokerage firms.The history of securities trading in Jordantraces its origins back to the 1930s. In 1976,the Amman Financial Market was establishedto create a regulated trading market. Morerecently, as part of Jordan’s move to upgrade itscapital market, a Securities Law was enacted in1997 separating the supervisory and legislativeroles from those of exchange operations. Asa result, the Jordan Securities Commission(JSC) was created in the year 1997, the ASEand the Securities Depository Center (SDC)were established in 1999. The JSC supervisesthe issuance of and trading in securities andmonitors and regulates the market. The SDCoversees clearing and settlement and maintainsownership records.To provide a transparent and efficient market,the ASE implemented internationally recognizeddirectives regarding market divisions andlisting criteria. It also adopted procedures forimproving regulatory effectiveness.The ASE is charged with:• Providing companies with means of raisingcapital by listing on the ASE,• Encouraging an active market in listedsecurities based on the effectivedetermination of prices and fair andtransparent trading,• Providing modern and effective facilities andequipment for trading, recording the tradesand dissemination of prices,• Monitoring and regulating trading, incoordination with the JSC as necessary, toensure compliance with the law, a fair marketand investor protection,• Setting out and enforcing a professionalcode of ethics among its member directorsand staff,• Ensuring the provision of timely and accurateinformation of issuers to the market anddisseminating market information to thepublic.On March 26th 2000, the ASE launched anautomated order-driven Electronic TradingSystem. The system is in compliance withinternational standards and takes into accountthe G-30 recommendations. This system alsooffers brokers immediate access to stock pricesand orders and enables members to traderemotely.In May 2006, the ASE has activated a newversion of the electronic trading system (NSCV2+), which comes as part of the efforts tomeet the increasing needs of the Jordaniancapital market and in order to raise the capacityof the current electronic trading system toaccommodate the increase in the daily tradingvolume.On March 22nd 2009, the ASE launched thenew version of the electronic trading systemNSC V900. This project is considered aquantum leap for the concerned institutionsas the electronic trading system has becomelinked with the SDC systems and the JSC newmonitoring systems. The new version will helpdevelop the trading process at the ASE andenhance the capacity of the electronic tradingsystem.On July 14th 2010, the ASE launched theInternet Trading service. This service is seen asa major opportunity for interested investors totrade in securities regardless of their geographiclocation. In addition, the service will helpincrease the number of investors at the ASE andenhance their aptitude to engage in securitiestrading.PAGE 20
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013AMMAN STOCK EXCHANGEOn November 1st The (ASE) launched anew market segmentation where marketswere reclassified by virtue of the new ListingDirectives that became effective as of 1/10/2012. The ASE began the implementation of thenew trading hours and the new price thresholdsaccording to the new segmentation.The ASE ‘s Board of Directors determined theprice thresholds for the shares of companieslisted on the First Market to become (7.5%)instead of (5%). The price thresholds for theshares listed on the Second and the Thirdmarkets remained (5%). The new directivesobliged all the listed companies for the first timeto provide the ASE with their quarterly reportsreviewed by the companies’ auditors as of thefirst quarter of the year 2013. Starting January2013 the ASE launched three indicies pertainingto each individual market.As for the Jordan National Financial Centerbuilding, procedures are being taken in orderto transfer the ownership of the building tothe Treasury of the Hashemite Kingdom ofJordan, and the ASE will close the accounts ofthe project and finalize the ownership transferduring 2013.FUTURE OUTLOOKThe Amman Stock Exchange will embarkon a number of key projects that will ensuremaintaining the lead that the ASE has amongstArab and regional stock exchanges. Theseprojects can be summarized as follows:• Continuing upgrading the technicalinfrastructure.• Launching new financial instruments.CAPITAL MARKET DEVELOPMENTAND ECONOMIC OUTLOOKThe Jordanian Economy has achieved a realgrowth of 2.5% during 2012, where the GDPreached USD 30,981 million, while the inflationrate reached 4.8% due to higher internationalfuel and food prices.As for the monetary policy, the Central Bank ofJordan has increased the re-discount rate from4.5% at the end of 2011 to 5.0% at the end of2012. Interest rate on 6-month Treasury Billsrose from 3.2% at the end of 2011 to 3.8% atthe end of 2012, while the weighted average ofinterest rates for loans rose to 9% at the end of2012 compared with 8.7% at the end of 2011.Domestic liquidity measured by Money Supply(M2) grew by 3.4% at the end of 2012 comparedwith its levels at the end of 2011. In addition,foreign currency reserves at the Central Bank ofJordan stood at USD 6,616.1 million at the endof 2012.Regarding the fiscal policy, public revenuesshowed a decrease of 6.6% at the end of 2012compared with the year 2011, while publicspending showed an increase of 1.0%.As for the External Trade Sector, Jordanianexports and re-exports have decreased by 1.2%at the end of September 2012 compared withthe same period of 2011 while imports haverisen by 10.5% during the same period.Key Information ContactsJordan Securities Commission www.jsc.gov.joSecurities Depository Center www.sdc.com.joJordan Investment Board www.jordaninvestment.comArab Monetary Fund www.amf.org.aeMinistry of Finance www.mof.gov.joCentral Bank of Jordan (CBJ) www.cbj.gov.joNational Information Center www.nic.gov.joDepartment of Statistics www.dos.gov.joCONTACT INFORMATIONContact Name Mr. Nader Azar E-mail nazar@exchange.jo Website www.exchange.joPAGE 21
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