Amman Stock Exchange Jalil Tarif Chief Executive Officer Dead Sea - Jordan October 2007 AMEDA...

Amman Stock ExchangeAmman Stock Exchange

Jalil Tarif

Chief Executive Officer

Dead Sea - Jordan

October 2007

AMEDA Meeting

Amman Stock Exchange

History of Capital Market

1930s Trading in Securities started informally.

1976 Amman Financial Market (AFM) was established.

1978 AFM started operations.

1997 Capital Market Reforms introduced, Securities Law issued.

1997 Jordan Securities Commission (JSC) was established.

1999 Amman Stock Exchange (ASE) was established.

1999 Securities Depository Center (SDC) was established

2002 New Securities Law Issued.

Capital Market in Jordan

Financial Brokerage

Financial Services Companies

Securities Depository Center (1999)

Jordan Securities Commission (1997)

Amman Stock Exchange (1999)

Mutual Funds

Public Shareholding Companies

Custodian

Management of Primary Issues

Financial Advisory

Investment Management

Investment Trusteeship

Certified Financial Professionals


Amman Stock Exchange (ASE)

Established in March 1999

Independent legal entity

Managed by private sector

Membership of brokers

Non for-profit


Securities Listing Requirements

First Market

Financial Position Requirements:

Profitability

Dividends ( Cash or Stock)

Liquidity Requirements:

Free Float

Turnover

Trading Days

Number of shareholders

Financial Reporting:

Annual Report

Semi Annual Report

Quarterly Report

Second Market

Right to Commence Operations

Financial Reporting:

Annual Report

Semi Annual Report

Continuous Listing Requirements

BondsGovernment and Corporate Bonds are eligible for listing


Trading System Overview

Production Servers

UNIX BOXHigh Availability ClusterPowerful Dual Processor

HostsMain DatabaseTrading System

UsersTrading FloorSurveillance

TV Channels

Data Vendors

Information Dissemination

Websites

CONNECTIONFiber OpticsLeased Lines

FACILITIESRemote TradingRemote InquiryIntranet

Backup Trading Floor Surveillance

Mobile Phones

Remote Brokers

(NSC) (GL)

Information DisplayScreens

Market Monitors


Information Dissemination

ASE disseminates clear, accurate, sufficient and timely

information and data on securities trading.

ASE discloses information on issuers, members, and material

information. Public may have access to these material.

Data disseminated through GL stations, data vendors, market

watch, ASE website, and TV stations.

Times of transactions information posted at the ASE site.

Post trade data sent to brokers through Domino.

http://www.exchange.jo

http://www.exchange.jo/

ASE Market Capitalization & Trading Value

0

5000

10000

15000

20000

25000

30000

35000

40000

2000 2001 2002 2003 2004 2005 2006 2007*

Market Cap

Trading Value

(US

$ m

illi

on)

* End of September


Average Daily No. of Transactions

812

564

638

547

1226

1801

3262

4789

9805

13580

14224

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007*

* End of September


ASE Performance

-60

-40

-20

0

20

40

60

80

100

120

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*

ASE General Weighted Index Emerging Market Composite Index

(%)

* End of September


Primary Market(U

S$

mil

lion

)

(Point)

* End of September

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1999 2000 2001 2002 2003 2004 2005 2006 2007*

1000

2000

3000

4000

5000

6000

7000

8000

9000

Primary Issues ASE General Index


Market Velocity

0

10

20

30

40

50

60

70

80

2000 2001 2002 2003 2004 2005 2006 2007*

(%)

* End of September


The Market P/E Ratio

0

10

20

30

40

50

2001 2002 2003 2004 2005 2006 2007*

Historical Average = 17

(Tim

es)

* End of September


Non-Jordanian Ownership, September 2007

36

38

40

42

44

46

48

2001 2002 2003 2004 2005 2006 2007

(%)


Recent Study by IMF

Investors may be able to achieve additional

diversification by investing in the ASE

On a risk-adjusted basis (Sharp Ratio),the ASE

outperformed most markets.

ASE compares favorably with many other regional

markets in terms of investment climate.

Low price volatility.

Permissible Equity Markets Investment Analysis, CalPERS

Country Macro-Factors

Political Stability

Transparency

Productive Labor Practices

Market Macro-Factors

Market Liquidity and Volatility

Transparency

Market Regulation/Legal System/Investor

Protection

Capital Market Openness

Settlement Proficiency/ Transaction Costs

Poland

Israel

South Korea

Chile

Czech Republic

South Africa

Taiwan

Hungary

Mexico

Malaysia

Brazil

Jordan

India

Thailand

Turkey

Peru

Argentina

Philippines

Colombia

China

Morocco

Sri Lanka

Venezuela

Indonesia

Russia

Egypt

Pakistan


Future Plans

Jordan National Financial Center Project

Upgrading the trading system

Internet trading.

Demutualization

New ASE Dow Jones Index



The Center will contain:

ASE

SDC

Financial Studies Center

Brokers’ Offices

Investors Gallery

Other facilities

The Center total area 85758 m2 .(Buildings area 51766 m2)

Total cost US$ 100 million

Expected completion date November 2009


Project’s Site


Project’s Concept

The external design of the building is inspired from the Siqq of Petra which is considered an ancient symbol in Jordan’s history.


Upgrading the Trading System

A contract was signed with AtosEuronext Market Solutions and GL Trade for Euro 2.5 million.

New trading system V900.

Fully Linux environment.

System applied in major stock exchanges.

Better flexibility to implement market rules.

Highly improve system capacity and lower latency.

The new system will be up and running by May 2008.


Demutualization

The new Securities Law for 2002 authorized setting up other stock exchanges

The ASE may be restructured by a decision of the Board of Commissioners of the JSC, upon approval of the Council of Ministers.

Negotiations are taking place with alliances to support demutualization process.

The ASE shall become shareholding company totally owned by the Government as a first step.

The Government then shall sell a share to financial institutions, brokerage firms, international institutions and other parties.


New ASE Dow Jones Index.

An agreement with Dow Jones was signed in late 2006

Dow Jones will calculate a new composite index, named “The Amman Stock Exchange and Dow Jones”.

The new index will be weighted by market capitalization of free float shares.

The index can be used as a base tool in forming financial derivatives and ETFs.

The index will be launched in late 2007.


Other Projects

Internet Trading.

Joining the WFE.

Codes of Corporate Governance

Introducing new instruments.

Marketing strategy.


International Exposure


Investment Opportunities

No taxes on cash dividends

No capital gains tax

Free repatriation of investment and income

No ceiling on foreign equity ownership

Political StabilityPolitical Stability

Economic Openness and Free Trade

Economic Openness and Free Trade

Privatization

Amman Stock Exchange Jalil Tarif Chief Executive Officer Dead Sea - Jordan October 2007 AMEDA...

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