Jordan Times
Sunday, September 3, 2006

Weekly Analysis: Amman Stock Exchange

AMMAN — The Amman Stock Exchange (ASE) sustained the 6,000 points level, achieved last week, to finish at 6241.3 points, up by 3.89 per cent with the real estate and services sectors dominating trading volume. The market capitalisation stood at JD23,582,835,925.

Income from tourism increased by 8.4 per cent during the first seven months of this year to reach JD593.5 million compared to JD547.4 million achieved during the same period last year.

On the trading floor, average daily trading volume decreased by 8.11 per cent reaching JD78.333 million. Overall advancers outnumbered decliners as 88 companies out of 163 advanced, while 66 companies declined.

In the banking sector, the Arab Bank (ARBK) signed two agreements with Jordan telecom (JTEL), the first includes connecting the bank’s general management with the substitute IT centre through fibre optics, in addition to insuring the bank’s quality of services. Moreover, ARBK is restructuring its branches under Arab Bank-Europe, in London, with a paid up capital of 500 million euros, thus enhancing its presence in all European Union Countries. Additionally, ARBK’s BOD decided to list the bank’s shares in the Dubai Financial Market and the Abu Dhabi Securities Market, as part of ARBK’s strategy to expand and boost its regional and international presence. ARBK’s stock price closed at JD24.8, up by 8.77 per cent.

Based on our estimates for ARBK’s 2006 net income, which is expected to reach JD466.2 million, the bank’s shares are trading at a forward P/E multiple of 18.7x. In the insurance sector, 8 insurance companies captured 54 per cent of the sector’s total insurance premiums, which reached JD131.8 million in the first half of 2006.

Nevertheless, the sector’s profits declined to reach JD3.9 million during this period compared to JD44 million for the same period last year. The decline came mainly as a result of a sharp drop in the companies’ investment portfolios, especially those in the ASE.

In the services sector, United Arab Investors’ (UAIC) general manager expects the company to acquire the necessary approvals allowing the company to increase its capital to reach JD150 million within the coming two weeks. UAIC’s general manager re-emphasised that the increase, consequent to the entry of strategic partners, will contribute JD45 million to the company’s equity, in addition to the JD30 million capital increase. The increase in capital came as UAIC’s extraordinary general assembly approved the partnership proposal that took place in May.

Global Investment House’s share of the capital increase is expected to reach JD15 million, whereas Tammeer - Jordan’s (TAMR) shares will amount to JD5 million, Arab Real Estate Development (ARED) JD5 million, and the Arab investor, Mr. Saeed Omeir’s stake will equal JD5 million shares.

On a different note, Investors & Eastern Arab for Industrial & Real Estate Investments (IEAI), owner of Al-Mushata Industrial Park, signed a memorandum of understanding with Four Trees Investment and Trading, through which the latter will market the new project, identify and locate investment opportunities, as well as attain foreign investments from Asia, Europe, and the Americas.

Furthermore, Four Trees will be responsible for monitoring, controlling, and scrutinising the quality of production. Jordan Telecom’s (JTEL) chairman anticipates the signing of a partnership agreement with Bahraini investors by year-end. The partnership will aim at providing an “added value” in the telecom and information technology sector in Bahrain. Moreover, JTEL’s chairman stressed that the government’s revenues from the company’s privatisation reached over $1.8 billion.