FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
DAMASCUS SECURITIES EXCHANGE
CAPITAL MARKET DEVELOPMENT AND ECONOMIC OUTLOOK
Political Outlook
A reflection to Syria’s economic development in
2010 will show a determination economy, willing
to plan and execute sustainable progress, in its
multiple dimensions. Touching on the various
aspects revolving in and around the economy,
the Syrian internal and external mechanisms
are drawing clear plans to encourage public,
private, and co-operations, in enhancing the
economic performance for the coming years.
The public and private sectors are working on
multiple fronts to set a productive base across
Syria’s key economic drivers. Through various
mechanisms as fiscal, monetary, social, and
technological policies, decision makers at
different levels are tackling the progress of
investment frameworks, business environments,
trade agreements and political relations.
The Oil & Gas sector, and despite an average
decline of 4.1% per annum in oil GDP’s
real growth, the oil sector was estimated to
grow 0.2% in real terms during 2010. This
growth remains small despite government
efforts to attract foreign investments for new
exploration and production. Nevertheless,
crude oil production has risen 3.1% yearly on
average, reaching 387,357 barrels per day in
the third quarter of 2010. The production at
new and smaller fields outweighs the dwindling
productions of mature sites; however, this is
only a temporary situation. Meanwhile, gas
production is on a priority list as multiple co
operations are in the pipeline to increase
production and export lines with strategic trade
partners.
Economic Performance
On a country-wide level, Syria’s economy
in 2010 indicated an expected 5% real GDP
growth, with an additional 0.5% increase
through 2011, as per the International Monetary
Fund (IMF). Projected indicators had shown
nominal GDP standing at 59.6 billion US$ at end
of 2010, with an expected increase of 6.6 billion
US$ throughout 2011, to reach a total 66 billion
US$. The Construction & Real Estate sector has
attracted huge attention on the economic map.
The lack of supply, low real interest rates, lack of
proper investment opportunities, and rising cash
flows from Gulf investors and Iraqi immigrants
have all contributed to a sharp increase in the
price of real estate properties. Consequently,
major developers have taken initiative to build
large commercial and residential spaces in both
urban and rural areas. Accordingly, the trend
has reversed with light price adjustments in the
last eighteen months.
Meanwhile, the consumer price level remained
at a moderate 5% and is expected to remain
as is through 2011. Unemployment continued
to show concern as it stood at almost 11%.
Furthermore, the overall fiscal deficit is expected
at 2.6 billion US$ for 2010, accounting for
a smaller share of GDP compared to 2009,
namely 4.3% versus 5.4%, respectively. The
higher revenue in oil revenues and reduction
in fuel subsidies were the main drivers to
fiscal adjustments. Moreover, the government
budget is expecting a spending of 17.8 billion
US$, representing a 12% rise that is mostly
represented by investment expenditures. The Trade & Services sector marked strong
activity through 2010. The number of visitors
reached 6.6 million through September, noting
an increase of 46% year-on-year. Tourist
expenditures reached 6.5 billion US$ within the
abovementioned period, and the industry as a
whole contributed to 5.2% of GDP. In addition,
the telecom sub-sector has been run by two
large operators that have contributed to a 42%
in mobile subscribers, while the landline network
increased subscribers by 6.6% as of end 2009.
Currently, six companies are bidding to take
a pie of the sector’s success that is about to
accommodate a third operator.
The Financial sector has witnessed various
incentives in attracting funds and increasing
lending volumes. In spite of the effects of
the crisis on remittances and FDI, the Syrian
financial sector has been supported by lower
reserve requirements, lower interest rates, and
increased credit exposure limits. The money
supply expanded 12% year-on-year in July 2010,
and has moved in line with GDP growth. The last
quarter of 2010 saw the first sale of government
bonds. While the financial sector has made an
outstanding growth in terms of assets, deposits,
and credit, the financial community awaits the
introduction of more financial instruments and
better allocation mechanisms to the sector’s
excess liquidity.
The Syrian capital market currently stands at
an average daily trading value of 43 million
SP and an average daily trading volume of 34
thousand shares. The market index posted an
approximate 71.9% gain in 2010. It is currently
composed of 20 companies listed within 5
sectors, namely, Banking, Insurance, Service,
Industrial, and Agricultural. The Banking sector
holds the highest market capitalization at 131
billion SP, out of a total 144 billion SP. The market
is currently receiving coverage by 12 financial
brokerage companies.
In retrospect, the Syrian economy in 2010
continued to show strength through multiple key
sectors. Despite multiple drawbacks resulting
from a world crisis recovery, regional slowdown
in investments, and difficulties of moving into
an open market economy, the Syrian economy
and its key decision-makers are showing
resilience in creating stability and progress in
increasing the performance of internal & external
economic indicators. Looking forward onto the
development 7 execution of Syria’s 5-year plan,
the targets set for infrastructure and investment
planning are providing solid confidence for
local, regional, and international participants.
Information obtained from the Exchange.
Key Information Contacts
Damascus Securities Exchange www.dse.sy
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