Atlas ASE Market Brief 21 June 2001

Amman Stock Exchange (ASE)

Weekly Commentary (17th - 21st June)

Semblance of Growth

Preliminary figures for first quarter GDP growth have been released by the Department of Statistics, showing real growth of 3.4%, which stands firmly above nominal growth of 3.2%. Given these numbers, it's implied that overall prices have headed south, pulled by a falling Producer Price Index (PPI) and a tiny rise in the Consumer Price Index (CPI).

Despite the apparently improving numbers, the market did not react favorably as the AMI slipped 2.53 points. Symptoms of trimmed activity were apparent as value traded slipped below the JD1 million mark on Sunday, an uncommon occurrence since the end of last May. Nevertheless, overall trading activity was stable as 5.7 million shares changed hands in deals worth more almost JD7 million.

A vibrant banking sector led the way in terms of activity with the Arab Bank (ARBK) slipping 5% to JD160, while Jordan National Bank (JONB) broke the JD1 barrier for the first time since October of last year to end at JD1.03. Jordan Steel returned to the scenes once more as more than 0.25 million shares were executed in block deals on Thursday, bringing its price to JD1.02. Rum Metal Manufacturing (IENG) also staged a strong comeback with almost 1 million of its shares also trading on Thursday alone. IENG closed up 4% for the week.

Jordan Phosphate Mines (JOPH) announced that it has signed a deal with an Iranian company, Chemical Fertilizers, to export around 400,000 tons of phosphate, annually. The company also announced that similar talks are underway with firms in South Korea. Meanwhile, JOPH's management also announced that sales volume for the first few months of the year have risen by some 4% to 1.55 million tons of phosphate compared with the same time last year. JOPH also revealed that year to date production stood at around 2.6 million tons while in addition, it has managed to lower its production costs by US$10 per ton. JOPH's management believes that profits seem plausible if the government were to cut mining and docking fees.