THE FIRST HEAD of Jordan's new Jordan Securities Commission (JSC) is a man in a hurry. Michel Marto's remit is to get regulations governing a revamped financial market into place within two years - but he wants to see most of the business done much sooner.

'It needs nine months of hard work,' says Marto. 'We want everything ready for 1 September 1998.' And there is no better time than the present to get things moving. 'Jordan's economy is stable rather than glamorous,' he says. 'We have taken a lot of the right steps and we have the best economic figures in the region, including the country' first current account surplus in 10 years.'

The JSC issued its first set of new regulations in October 1997, just weeks after Marto resigned as deputy governor of the Central Bank of Jordan (CBJ) to take on the work of establishing the JSC as the regulatory body for a fully independent stock exchange (see box).

Marto says the next big challenge for the five-member JSC is to get regulations governing financial disclosure into place. The Amman Financial Market (AFM) has a good reputation on disclosure, but little has been done in the past 10 years to strengthen its regulatory framework. Marto is confident that the next batch of regulations, which are already complete in draft form, could lead to a tripling or quadrupling of market activity.

The AFM's performance in 1997 was encouraging. Trading grew 42.5 per cent to JD 355 million ($499 million), up from JD 249 million ($351 million) in 1996. Prices were also up 10.3 per cent. Marto believes the performance would have been much better if it were not for exogenous factors that complicate the task of promoting the AFM. 'The feel-good factor depends on regional developments such as progress on peace, open borders and so on.'

However, domestic actions can certainly help. Marto points out that Jordan's new companies law has already encouraged a number of listed companies to increase their capital, either through the capitalisation of reserves or new issues.

The government's privatisation programme should also provide a boost, although Marto has expressed some impatience at the slow rate of progress in this area. At the 16 January press conference where he presented the figures for 1997 activity on the AFM, Marto suggested that the repeated delaying of plans to sell a stake in the Jordan Telecommunications Company (JTC) had deterred substantial foreign investment.

Nevertheless, there are growing expectations that there will be some progress this year, including the JTC sale and other offerings. The Jordan Cement Factories Company and the National Electric Power Company (NEPCO) are the most likely candidates for a partial privatisation.

Foreign inflows are already improving. Net non-Jordanian investment reached JD 57 million ($80 million) in 1997, up from JD 9 million ($12.7 million) in 1996. Marto predicts that foreign investment in the AFM should reach JD 100-150 million ($140-200 million) in 1998 and 1999.

The success of the $100 million sovereign bond issue by the Jordan Phosphate Mines Company (JPMC) and Jordan's first Global Depository Receipt (GDR) - issued in London by the Arab Potash Company (APC) in 1997 - have already raised international awareness of the Jordanian market.

Parallel action by the CBJ to provide a modern financial infrastructure should also have a positive impact on perceptions. The CBJ is working on new banking laws, a depositors insurance corporation and automated payment systems.

Although Jordan cannot dictate or control the external political and economic influences that buffet the country, Marto is confident that prudent management has left the economy on a firm footing.

'We have gone through our economic restructuring,' he says. 'We do not have any overly expensive pension funds or social security system, the banks are under close supervision and we have no major industries in a bad way.'

Marto expresses similar equanimity about the fact that the AFM, the JSC and the new depositary still do not have a permanent home. Long-standing plans for new premises for the AFM will have to be revised to accommodate all three bodies.

In the meantime, Marto insists that the show must go on. Computerisation and other moves to modernise the market need not wait for a new building and a new computerised system, funded by the French government, will be in operation before the end of 1998.