FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
AMMAN STOCK EXCHANGE
The Amman Stock Exchange (ASE) has
achieved positive indicators during the year
2008, despite the global financial crisis.
Jalil Tarif
Chief Executive Officer
The Amman Stock Exchange (ASE) has
achieved positive indicators during the year
2008, despite the global financial crisis, which
affected the financial markets around the
world. For example, foreign investment in the
ASE continued its upward pace and
confidence, and increased by the end of 2008.
Non-Jordanian investors ownership in the ASE
market capitalization increased to 49.2% which
is an indicator of the growing concern of
foreign investors in the ASE. Besides, there
has been a significant increase in the trading
value, number of shares traded as well as
number of transactions. Moreover, listed
companies at the ASE have achieved a good
growth in their profits during the year 2008.
The ASE in cooperation with Dow Jones
launched the Dow Jones ASE 100 Index. The
index is a broad benchmark index that tracks
the performance of the 100 largest stocks
listed at the ASE based on free-float market
capitalization. The Dow Jones ASE 100 Index
was developed to meet the demand for index-
based products at the ASE. The Dow Jones
ASE 100 is expected to further enhance
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. A Chief Executive Officer oversees
day-to-day responsibilities and reports to the
board. The ASE membership is comprised of
Jordan’s 70 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
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 in the
year 1997, the ASE and the Securities Depository
Center (SDC) were established in 1999. 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.
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.
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transparency, visibility and accessibility of the
performance of the ASE for Local, regional
and international market participants by
applying Dow Jones Indexes' well-known and
widely used index methodology.
For the first time in Jordan, the Jordan
Securities Commission issued a Code of
Corporate Governance for the companies
listed at the ASE. The introduction of this code
is considered an important step forward in the
field of transparency and monitoring over the
public companies and in preserving the rights
of all stakeholders in these companies.
The ASE went on in 2008 with the new project
to build the Jordan National Financial Center.
His Majesty King Abdullah II laid the
foundation stone for this project. This center
will contain: the ASE, Securities Depository
Center, Brokers’ Offices, banks’ offices,
Investors’ Gallery, in addition to a specialized
institute for teaching investment and finance
related materials. The cost for this project is
expected to reach US$ 100 million.
The ASE is charged with:
• Providing companies with means of raising
capital by listing on the ASE,
• Encouraging an active market in listed
securities based on the effective determination of
prices and fair and transparent trading,
• Providing modern and effective facilities and
equipment for trading, recording the trades and
dissemination of prices,
• Monitoring and regulating trading, in
coordination with the JSC as necessary, to
ensure compliance with the law, a fair market and
investor protection,
• Setting out and enforcing a professional code
of ethics among its member directors and staff,
• Ensuring the provision of timely and accurate
information of issuers to the market and
disseminating market information to the public.
On March 26th 2000, the ASE launched an
automated order-driven Electronic Trading
System. The 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.
On May 2006, The ASE has activated a new
version of the electronic trading system (NSC
V2+), which comes as part of the efforts to meet
the increasing needs of the Jordanian capital
market and in order to raise the capacity of the
current electronic trading system to
accommodate the increase in the daily trading
volume.
To enhance the international exposure, the
ASE held two international conferences in
2008. The Second Jordan Capital Market Day
in March 2008 in London in cooperation with
London Stock Exchange, and the Second
Capital Market Conference in New York in
September 2008. These two conferences were
a great opportunity for Jordanian companies
to attract foreign investment and to raise
funds.
As for the ASE performance, the ASE Free
Float Weighted Index at the end of the year
2008 stood at 2758 points compared with
3675 at the year 2007 with a decrease by 25%.
Trading value during the year 2008 was the
highest ever, it reached US$ 28.7 billion with
an increase of 65% compared with 2007. The
number of shares traded increased by 22%
compared with 2007, reaching 5.4 billion
shares, and the number of transactions
increased by 9%, reaching 3.8 million
transactions. The ASE market capitalization
reached US$ 35.8 billion by the end of 2008,
with a decrease of 13% over the end of 2007,
representing 217% of the GDP.
FUTURE OUTLOOK
The ASE will embark on a number of key projects
that will ensure maintaining the lead that the ASE
has amongst Arab and regional stock exchanges:
• Establish Jordan National Financial Center. This
center will contain: the ASE, the SDC, Financial
Studies Center, Brokers’ Offices, Investors’
Gallery, and many other facilities.
• Upgrade the ASE Trading System. In this
regard a contract was signed with AtosEuronext
Market Solutions and GL Trade for EUR 2.5
million. The new trading system is V900 and is a
fully Linux environment. It should be mentioned
that this system is applied in major stock
exchanges. This system will be more flexible to
implement market rules and will highly improve
system capacity and lower latency.
• Demutualization of the ASE. The ASE shall
become Shareholding Company totally owned by
the Government as a first step. In the second
step the Government will sell stakes to financial
institutions, brokerage firms, international
institutions, public, and other parties.
• Introduce Internet trading. The legal and
technical structure for this project has been
completed.
• Adopt new marketing strategy. The ASE has
adopted a marketing and promotion strategy
based on three main fields: Awareness,
Marketing and Media. The implementation of this
strategy started in the 2007 and will continue in
the coming years.
• A new website now is under construction, with
a new look and theme, many information and
features will be added to the new site.
• Introduce new financial instruments such as
ETFs and derivatives.
• Launch new indices.