Plans to incorporate Jordan into the GCC have helped to boost the Amman Stock Exchange (ASE).

The GCC’s foreign ministers met in Saudi Arabia on 11 September to discuss Jordan’s five-year economic development plan and to outline procedures for Jordan’s accession to the council, although no timetable has been set.

“This has had a positive effect on sentiment in the market and hopefully this will last especially if there is strong commitment from the GCC to accept Jordan as a full member,” says Jalil Tarif, chief executive officer of the ASE.

The share prices index rose 0.08 per cent on 12 September as a result of the news.

The ASE has also buoyed on commitments of support from international and regional countries. The G8 has pledged $38bn to countries affected by the Arab Spring, which includes Jordan while Saudi Arabia has pledged $400m to Jordan alone.

The ASE has suffered from the Arab Spring and has felt the impacts of the sovereign debts of the US and some of the European countries.

In May this year, Jordan’s government revealed plans to cut salaries by 50 per cent for public sector employees and to strip staff off benefits as part of austerity measures to meet the country’s financing needs. Employees of the capital markets institutions responded by going on strike, although trading continued.

As a result trading volumes decreased about 15 per cent during the standoff, but restructuring plans have since been revised to appease the workers.  

“The government showed flexibility in dealing with the issues of the public sector institutions, which was a positive sign and things are now getting back to normal,” says Tarif.

Foreign investment on the markets is also improving.

“We have had more than $100m increase in net foreign investment and non-Jordanian investment has increased from 48 per cent since the beginning of the year to about 51 per cent of total market capitalisation,” says Tarif.

While the bourse has been showing improvement, but it is still falling short of trade levels seen at the beginning of the year.