REGIONAL: The young pretenders

26 May 2006

In mid-2004, with the country in turmoil, the Iraq Stock Exchange reopened out of a tent in a former hotel restaurant. Trading was unsurprisingly limited, but the move was evidence of the fact that creation of a bourse is regarded as a crucial plank of economic reform and development. And several of the region's less open economies are looking at the creation or enhancement of a local stock exchange to promote inward investment and private sector creativity. The move is well timed, with investors worldwide scouting out profitable new emerging market opportunities.

Libya is the country hitting the headlines for its steps towards international political rehabilitation, and economic reform is progressing - albeit slowly - in parallel. On 7 May, Tripoli announced plans for the establishment of a stock exchange, following cabinet approval, although no timeframe was laid out. An expansion of the shareholding community has already been effected through an initial public offering (IPO) of shares in Arab Cement Company, with the shares traded through a department at the Economy Ministry.

Syria likewise is moving to liberalise its state-dominated economy, with reforms such as the licensing of private foreign banks and plans to float the exchange rate. Creation of a bourse is part of the process. A commission was formed in early 2006 to draft a law to regulate the bourse, due for completion by the end of the year. It followed the issue of a law in June 2005 providing the framework for the creation of a securities and exchange commission.

Algeria has had a stock market since 1993, but activity is minimal and a mere two stocks are listed. However, in early May, plans were announced by the regulator, Societe de Gestion des Valeurs de Bourse, to inject AD 400 million ($5.6 million) into modernisation of the exchange and enhancement of trading activity. There is also talk of selling off stakes in some major government-owned companies via the stock exchange.

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