Arab Bank powers the market

To Scrutinize, or Not To Scrutinize!

The Atlas Market Index (AMI) made moderate gains throughout the week, pushed by market heavyweight Arab Bank (ARBK). This came as the bank's board of directors today formally agreed to the nomination of Abdul Hamid Shoman as general manager, succeeding his father, Abdul Majeed Shoman - who will retain his position as chairman of the board. This week, local and regional investors' interest grew significantly as they increased their positions in ARBK, plus the realization that it remains a solid bank, pushed its shares up by JD6.

In terms of trading activity, the market saw 5.3 million shares change hands in deals worth more than JD8 million, with ARBK, Jordan Steel (JOST) and Zara Investments (ZARA) accounting for 64% of the value traded.

As ZARA wrapped up its AGM on Saturday, its board announced that operating revenues for the year 2000 had jumped by 93% to stand at around JD32 million. ZARA, which dominates more than half of the five-star hotels market, also introduced two new board members representing the Social Security Corporation. Throughout the week, there was active trading of the company's stock, such that over 1.2 million of its shares changed hands - almost all in a single deal. Other scheduled AGMs just around the corner are those of Union Bank for Savings & Investment (UBSI) and the Jordan National Bank (JONB).

The CEO of the Amman Stock Exchange expressed his satisfaction with this year's performance by the market, which climbed around 5% despite the kingdom's difficult economic situation and the region's overall political environment. In a speech at a local university, he emphasized the general improvement in the profitability of the public shareholding companies for 2000, which climbed by 8% year-on-year (with the exclusion of Jordan Phosphate Mines' exceptional losses). He also highlighted a slight improvement in aggregate dividend payouts.

The Jordan Securities Commission (JSC) has announced that it is taking legal action against 27 public shareholding companies that have yet to comply with disclosure requirements. As of Wednesday, these companies had failed to declare their results for 2000 - thus undermining the JSC's reform campaign to protect existing and potential investors. Speaking of violators, only about 124 of the 163 listed companies have met the deadline for wrapping up their AGMs. According to Article 169 of the 1997 Companies Law, public shareholding companies must complete their annual meetings within four months of the end of their fiscal year. Ironically, as some general assemblies are approving their 2000 results, others are preparing to issue their semi-annual results.

On the communications front, the Jordan Telecom Company (JTC) has announced that the JSC has authorized it to register 250 million shares, in preparation for a potential listing on the ASE in early 2002. The move is expected to call regional and international attention to the ASE by underscoring the kingdom's seriousness about liberalizing its telecoms sector.