Capital Markets
From The Report: Jordan 2012
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Following four difficult years, 2012 looks set to be a turning point for the stock exchange as institutions and investors ready themselves for a stronger climate of investment and growth. In 2011, Jordan’s capital markets continued to suffer from wider regional and domestic events as investors’ fears were stoked by low economic growth, a tightening of fiscal spending and high interest rates. More positively, the year witnessed an increase in the share of foreign investment, from 49.6% in 2010 to 51.3% in 2011. There is a sense that many of the blue chip stocks with solid results remain undervalued, indicating prices are being affected by low investor confidence rather than fundamental concerns. Exchange regulators, for their part, are looking to encourage the specialisation of investment products and create a more sophisticated investment environment.

This chapter includes an interview with Samir Jaradat, CEO of the Securities Depository Centre; and Adel Kasaji, CEO of AB Invest.

Articles from this Chapter

Overview

A turning point: Investors and institutions are preparing for the market to pick up
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A combination of low economic growth, fiscal tightening and high interest rates produced relatively weak results on the Amman Stock Exchange (ASE) in 2011, with low levels of trading and new entrants. Despite reduced market sentiment, bright spots included an increase in the share of foreign investment and a growing sense that many of the blue chip stocks with solid results remain undervalued, indicating prices are being affected by low investor confidence rather than fundamental concerns. The…

Analysis

Smarter regulation: Plans are under way to enhance the regulatory framework
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Jordan has a triumvirate of institutions responsible for running and overseeing its capital markets, and is known regionally for the stability of its institutions, consistency of its policies and its ability to implement sound regulatory processes. The Amman Stock Exchange (ASE) runs the market and is in charge of ensuring an efficient and secure trading environment, and is supported by the Security Depository Centre (SDC), responsible for overseeing settlements and keeping ownership records.…

Interview

OBG talks to Samir Jaradat, CEO, Securities Depository Centre
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Interview: Samir Jaradat Do capital markets authorities need to give investors a broader range of investment tools and products to create greater depth within the exchange? SAMIR JARADAT: Investors in Jordan should be given a wider array of tools that cater to their diverse needs and interests, and that reflect changes in the global financial markets. Whereas some investors prefer ownership, others like to generate returns from extending loans. More and more, investors in the Middle East and North…

Analysis

Financing opportunities: A new private equity fund is designed to facilitate the growth of SMEs
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The perennial issue of lending to small and medium-sized enterprises (SMEs) in Jordan is being addressed by a new fund providing long-term financing and institutional support for up to 15 companies with high growth potential, particularly in the technology sector. The nascent private equity industry and conservative banking sector will be all eyes to see whether this initiative will set a new course in private sector lending in the kingdom. INS & OUTS: The $50m Jordan Growth Capital Fund…

Analysis

Bank Al Etihad: Banking
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THE COMPANY: Bank Al Etihad was established in 1978 and is currently the seventh-largest bank in Jordan in terms of assets. In the year 2011, the bank made the headlines with a major rebranding campaign that relaunched the company’s corporate image and changed its name from Union Bank to Bank Al Etihad. The campaign concentrated on delivering the message that the institution is committed to providing the most innovative and professional products to its clients. The rebranding of the bank in 2011 came after four years of collaboration with management consultants McKinsey, during which time the partners worked to formulate a new strategy that…

Analysis

Jordan Cement Factories: Mining & Extraction
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THE COMPANY: Jordan Cement Factories (JCF) was established in 1951 and started operations in 1954, making it one of the kingdom’s oldest enterprises. The company had an exclusivity agreement with the government of Jordan until 2001. The company went through a number of milestones, including establishing operations in Sudan and an exporting hub in the port of Aqaba in 1992. In addition, JCF produces cement in two factories and also sells ready-mix concrete through a subsidiary. In 1998 the Lafarge Group of France bought a 33% stake in the company, a share which was subsequently raised to 50.2%, giving Lafarge Group control over JCF. Lafarge…

Analysis

Jordan Express Tourist Transport: Transport
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THE COMPANY: Jordan Express Tourist Transport (JETT) is a publicly listed company with JD10.8m ($15.18m) in paid-in capital that provides passenger and tourist transport services. JETT transports passengers between Jordan’s main cities and from Jordan to Syria, Lebanon, Iraq, Egypt, Saudi Arabia, Qatar, Kuwait and the UAE using its own fleet or in partnership with other Arab carriers. The passenger transportation is carried out by JETT’s subsidiary, Passenger Transport Company, which in turns owns a subsidiary that provides passenger transport for VIPs. JETT’s fleet of 200 buses includes vehicles with capacities of up to 51, 30, 25,…

Analysis

Jordan Steel: Mining & Extraction
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THE COMPANY: Jordan Steel (JOST) was established in 1993, and has since grown to become the country’s largest steel producer, with 250,000 tonnes of capacity. JOST is a publicly listed company on the Amman Stock Exchange, with paid-in capital of JD35m ($49.18m). The company produces a variety of steel products, including concrete reinforcement steel bars in various diameters and lengths, flat and square bars, mesh wire, as well as steel billets. The company’s main clients operate in the construction industry. The company’s production of high-quality reinforcement steel started in 1996, and not long after JOST became the first steel…

Analysis

Siniora Food Industries: Food & Beverages
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THE COMPANY: Siniora Food Industries (SNRA) traded on the Amman Stock Exchange for the first time on January 29, 2012. The name Siniora, however, has been a recognised brand in Palestine and Jordan for almost a century, and has been synonymous with cold meat products. SNRA established its first food-processing factory in 1920, which was later relocated following the 1948 Arab-Israeli War to East Jerusalem, where it remained until 1997 when it was relocated again. In 1992 SNRA opened up its first factory outside the borders of Palestine in Amman, and in 1996 the company established an export department to handle its exports to major foreign…

Analysis

Specialised Investment Compounds: Real Estate
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THE COMPANY: Specialised Investment Compounds (SIC) was established in 1994 and is a publicly listed firm with JD25.8m ($36.25m) in paid-in capital. Since inception, SIC has spun off a number of public and private enterprises to undertake a wide range of projects, primarily in industrial and commercial real estate. Nonetheless, the company’s operations have grown to include residential real estate, catering, real estate management and ownership stakes in brand name restaurants. SIC launched its operations in Jordan, but over time the business has expanded to Egypt and Qatar, and the company has intentions to continue its expansion into MENA.…