Jordan Times
Wednesday, May 12, 1999
Jordanian,Kuwaiti stock exchanges sign memorandum of understanding
By Tareq Ayyoub
AMMAN — Jordan and Kuwait on Tuesday signed a memorandum of understanding that will allow Jordanian and Kuwaiti firms to be listed on the stock exchange of each country.
The agreement, signed by the Jordan Securities Commission (JSC) Chairman Bassam Saket and Abdullah Sdeirawi, Director of the Kuwait Stock Exchange (KSE), is the first such a move between the Kingdom and an Arab state.
Saket indicated that the agreement aims at reaching a stage where the bourses of the two countries are fully connected to each other to enhance the capital markets in Jordan and Kuwait.
He added that Jordan is consulting with Egypt, Bahrain and Lebanon to reach such an agreement.
The Jordanian official said that as a result of the agreement, the Jordan Kuwait Bank, will be listed soon on the KSE.
Jaleel Tarif, director of the Amman Securities Commission, told reporters that more talks on the “mechanism” that will govern the trading system will be launched to reach an agreement over this issue.
Among the solutions to the pricing issue is to offer enough information to the investors about the firms that are listed on the two bourses “so that supply and demand will decide the price.”
Sdeirawi said his country will come up with a new law that will allow non-Kuwaitis to buy and sell shares, as currently trading is restricted to Kuwaitis and nationals of the Gulf Cooperation Council, which groups Kuwait, Saudi Arabia, Qatar, Bahrain, Oman and the United Arab Emirates.
He said that the proposed law is expected to be approved by the Kuwaiti parliament by the end of this year.
“The agreement is part of our rapprochement plan towards Arab bourses to bring Arab capitals closer to each other,” Sdeirawi told reporters following the signing ceremony.
He indicated that the Kuwaiti bourse has reached a similar agreement with financial markets in Egypt, Bahrain and Lebanon.
The officials said that two agreements are expected to be concluded between the two countries for organising the listing and trading of shares in the two bourses and for settlement procedures between buyers and sellers of shares in the two bourses.
The KSE, which was established in 1983, is considered the third in terms of capitalisation in the Middle East, after Saudi Arabia and Egypt bourses.
Recent figures showed that 87 firms that are listed with a market value of $18.5 billion, compared to 167 companies in Jordan with a total value of $6 billion.