September Shivers

The market experienced a mixed trading week. Stock prices plunged the first two days of the week, which was quite surprising, as most observers mistakenly believed that the market had already absorbed the full impact of last week's events. As prices fell to unrealistic levels, investors jumped back in on Tuesday and the market rallied before making smaller losses towards the end of the week. According to some, high volumes suggest that some investors are cashing in on their earlier gains as further instability may threaten the region.

Despite the wariness, some speculative trades were still present; National Industries (NATI) experienced excessive trading on its stock as close to 0.6 million of its shares changed hands this week. This comes as the JSC had approved its request to raise the number of outstanding shares by 980,000 in exchange for capitalizing a portion of a JD0.245 million loan that is due to a local bank.

The Housing Bank for Trade and Finance (THBK) released its semi annual results for the year. They showed an 18% rise in net interest due primarily to the decline in its interest expense. While net earnings climbed some 21% to JD11.6 million, the stock managed to rebound to JD2.30, or 10% from this week's low, which in rather impressive given that only seven stocks managed to end the week in positive territory.

Similarly, the Export and Finance Bank (EXFB) made some healthy improvements in its semi-annual results. Its financial reports show that net earnings jumped almost 30% to JD1.75 million, despite the fact that it has had to provision for its share of a JD12 million bad loan to a major Jordanian client several months ago. Its price did manage to rebound slightly before ending the week down some 4% at JD1.26.

Activity in the primary market for 2000 surged over 1999. According to a report in a local paper, the value of primary issues at the ASE almost doubled to around JD105.9 million, while the value of bond issues also doubled to a bit less than JD70 million. The largest issuers of stock were Zara Investments (ZARA), Mediterranean Tourism Investments (MDTR), and National Poultry (NATP) with a combined issue of JD71.5 million.

On the regulatory front, the Jordan Securities Commission has permitted public companies to implement share buybacks schemes as of January 1, 2002. Naturally, certain restrictions apply, such as capping the number of repurchased shares to 10% of the total outstanding shares, in addition to the source of financing used to make the buyback. Meanwhile, the ASE has released a notification to brokers informing them of certain violations that have been occurring recently. It stated that it has come to their attention that certain brokers have been executing last minute trades at thin volumes for the sake of marking a particular security at a favorable price.