Jordan Times
Sunday, January 14, 2007
Weekly Analysis: Amman Stock Exchange
AMMAN — Public shareholding companies are
required to submit their preliminary 2006 financial results to the Amman Stock
Exchange (ASE) by February 15, 2007. The ASE index closed last week at 5528.3
points, up by 0.18 per cent. The market capitalisation stood at JD21.2 billion.
The Central Bank of Jordan announced that foreign direct investment reached a
record JD2.8 billion last year and that the ratio of nonperforming loans
declined from 15 per cent in 2000 to five per cent in 2006. These positive
indicators of Jordan’s economic and financial progress were supported by Moody’s
upgrade of the country’s sovereign credit from negative outlook to stable.
However, the performance was not all bright as the trade deficit rose by 25 per
cent to JD4.5 billion compared to JD3.6 billion in 2005. The Department of
Statistics has also announced that the inflation rate climbed 6.25 per cent last
year up from 3.5 per cent in 2005.
According to reliable sources, a 51 per cent stake of the government
wholly-owned Central Electricity Generation Company will be sold to Jordan Dubai
Energy Company, a subsidiary of Jordan Dubai Capital. The Social Security
Corporation is expected to buy a nine per cent stake.
On the trading floor of the Amman Bourse, the average daily trading dropped by
34.4 per cent to JD27.062 million. Overall, advancers outnumbered decliners as
109 companies out of 171 advanced, while 58 companies declined.
Under a banking deal being finalised, the National Bank of Kuwait may acquire a
big portion that could be as high as 50 per cent of Union Bank for Saving and
Investment. Union Bank’s share price rose last week by 1.04 per cent closing at
JD3.93 which represents a P/E multiple of 14.1x, according to CapitalInvest
forecasts for the bank’s 2006 earnings. The trading volume on the bank’s share
reached JD5.76 million.
In the insurance sector, Arab Orient Insurance announced receiving JD22.1
million in premiums last year, a 21 per cent increase over the amount in 2005.
as such, the company retained the biggest market share of the sector. The
sector’s index advanced by 8.82 per cent last week to 4523.1 points.
In the services sector, the preliminary results of United Financial Investment
Company revealed a 64.7 per cent decline in the company’s revenue to JD2.03
million, down from JD5.75 million in 2005. This decline in revenue reflects the
increased competition between the ASE brokerage firms whose numbers have
increased during 2006 from 48 to 63.
The diversified financial services and real estate sub- sectors controlled 45.9
per cent of the trading volume with a total of JD62.1 million.
In the industrial sector, Jordan Cement Factories Company has announced the
commencement of its plan to renovate and enhance its Rashadia plant. According
to the plan, one of the factory’s production lines will be suspended for 18 days
during which work is expected to be completed. The project, estimated to cost
JD29 million is expected to reduce the emissions from the plant and make the
factory more environment-friendly.