The banking sector continues to be the main driver of the market, accounting for about 37 per cent of the average monthly trading volume over the past five months. The stock of Arab Bank, which dominates the market, rose by 115 per cent from the first quarter of last year to the first quarter this year. Other banks enjoyed similar success over the same period.

The telecoms sector has also seen some recent activity. Goldman Sachshas been appointed to advise the government on the sale of its remaining 41.5 per cent stake in Jordan Telecom (JT).The state-owned company is still the only telecoms company listed on the exchange, but Fastlink, which is majority owned by Kuwait's MTC, is also understood to be considering listing.

Analysts believe it is unlikely that there will be any major initial public offerings (IPOs) in the near future. However, there have been some smaller IPOs over the last three months: investment banking firm Amwal Investwith a capital of $28.2 million; Universal for Brokerage Services, a new brokerage firm with capital of $7 million; and real estate company Jordanian for Real Estate Developmentwith a capital of $21.2 million.

Yet the rapid growth has sparked fears in some quarters of overheating. 'There could be a bubble developing,' says an Amman-based investment banker. 'The stock market saw a rise of 75 per cent this year compared with 65 per cent last year and 62 per cent the year before - how can it increase by 200 per cent? Is this a realistic reflection of profitability?'

Others believe the rapid growth is built on a solid base. 'During the second half of 2004 some important developments took place that allowed for the accelerated growth we are now seeing,' says Abdullah Awad, an analyst at Atlas Investment Group, the investment banking arm of Arab Bank.

'First, the Jordan Securities Commission issued a new regulation obliging all listed firms to disclose their financials on a quarterly basis, which improved the market's transparency and efficiency and gave investors confidence. Second, in July 2004 the ASE dissolved the third market on the exchange, moving companies to the first and second markets. Eighty-four companies are now listed on the first and 104 listed on the second. The move widened the choice of investments and attracted new liquidity to the market, resulting in higher trading volumes. The effect began to appear towards the end of 2004 and the beginning of 2005 - that is why the index has been accelerating so much.'

Looking forward, Awad believes the market will start to level out. 'Interest rates have started to rise and some short-term investors are leaving the market. Although there is still steam left in some stocks, I think the exchange will stabilise over the next few months.'

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