Libyan exchange trades fall

28 March 2012

Only one company actively trading on reopened bourse

Trading volumes on the Libyan Stock Exchange (LSE) are down 50 per cent since before the revolution.

The bourse reopened on 15 March with ten listed companies with a total market capitalisation of LE3.9bn ($3.11bn). But currently only one of those companies is trading.

On 27 March, United Insurance traded 500 shares worth LE10,000.

Before the revolution that ousted Muammar Gaddafi, only two companies were actively trading at an average of up to $200,000.

Currently the finance sector dominates the exchange, but more listings and initial public offerings (IPO) are expected. The country’s two telecommunications operators, Al-Madar Al-Jadeed and Libyana, both government-owned entities, are expected to IPO by June this year. Both organisations had intended to IPO towards the end of 2010.

“Stocks have opened at around the same price they were trading at before the revolution, which is a good thing. Volumes will come back once investor confidence builds up,” says Malik Kanawati, chief executive officer at Bahrain-based regional brokerage firm Mubasher Financial Services. “Everyone doubted whether they could open the market in time, but they have managed to do it.”

Mubasher is one of three international brokerage houses in Libya. It is in the final stages of obtaining its margin trading licence for its Egyptian operations.

The company recently increased the capital of its Egypt branch by 50 per cent to £E8m in a bid to secure the licence.

“We have demonstrated the systems with the regulator and are hopeful we will [be granted the licence] soon,” says Kanawati.

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