Jordan Times
Saturday, July 24, 1999
Talk of economic recovery does not influence investors to trade actively at ASE
AMMAN (J.T.) — AHMAD AL Disi, manager of a brokerage company, blames the sluggish activity at the Amman Stock Exchange (ASE) and the continued decline in prices on lack of incentives that would prompt investors to trade shares and stocks. "The investors do not see or feel any tangible and realistic moves. Giving statements and talks no longer affect dealings at the bourse," Disi said stressing that investors are fully aware (of the situation). "Promoting the talk that the economy has recovered and is progressing does not instigate the investors to intensify dealings unless they feel something real happening," he added.
He dismissed as untrue the talk of a wait-and-see attitude pending the release of mid-year results by companies. "Most of the shares that are traded on the market and that have a direct impact are those considered as prime shares of companies whose results are often known," Disi said noting that the dealings in these shares did not post any noticeable change and have remained at the same level.
Disi questioned the deals that some foreign investment portfolios carry out at the bourse. "There is a strange phenomenon that raises question ... that is the purchases of large volume of shares by those portfolios and then selling them after a short while even at a loss," he said describing the foreign portfolios as negative speculators.
He considered the high foreign or local indebtedness of the country as a reason for restraining the foreign investment at the bourse and, consequently for depressing the market. Disi indicated that psychological effects influence the bourse but it is only temporary.
The manager of the brokerage company said the recent Central Bank move lowering the interest rates on certificates of deposits to eight per cent was widely welcomed by all parties. He added that the reduction of interest rates by banks would consolidate and support the bourse.