Marie-Louise Gumuchian Tripoli
Libya’s stock exchange resumed trading yesterday after more than 12 months out of action, as the country gets back to business after last year’s conflict ousted leader Muammar Gaddafi.
Officials on the trading floor rang a bell then shouted “Allahu Akbar!” or “God is great!” to announce the start of trading on a bourse which, its backers say, could take off now that it is unshackled from Gaddafi-era restrictions.
“People are scared to come to Libya because they fear all the guns.
“Today can show them that Libya is going back to normal,” said a visiting businessman from Dubai, who did not want to be identified.
After the 90 minutes allotted for trading each day, the market stood at 1 437.69 points, flat on the level at which it closed in February last year.
The only stock showing any sign of movement on the huge electronic trading screen was Tijara Bank, whose shares rose slightly. However, the volume – 452 shares traded – was not big enough to register any impact on the stock market index.
“There are few buyers and sellers. People are afraid of falling prices,” said Ahmed Mejburi, a broker for Economic Group Libya. “The market has been closed for one year. It’ll start weak and, step by step, get back.”
Ten companies resumed trade yesterday out of a total of 13 listed, which includes the stock exchange itself.
Officials have said the reduction was because some of the companies had not yet met the exchange’s regulatory requirements.
The bourse stopped trading soon after a rebellion broke out against Gaddafi’s 42-year rule. Its relaunch is likely to attract interest from foreign investors seeking opportunities in Libya, which is home to Africa’s biggest proven oil reserves.
The companies listed on the exchange have a combined market capitalisation of about 3.9 billion Libyan dinars (R23bn), the general manager, Ahmed Karoud, said last month.
The biggest companies include Jumhiriya Bank, Sahara Bank and Wahda Bank. A bourse official said that, to avoid volatility on the opening day, trading would be briefly suspended if shares rose or dropped by more than 1.5 percent.
Under Gaddafi, the bourse attracted fitful foreign interest. Investors were keen for a slice of the lucrative Libyan market but they were often put off by red tape, currency restrictions, and arbitrary rulings from Gaddafi and his inner circle.
The head of the bourse said that he planned to make the bourse a more attractive place for foreigners to invest. Last month Karoud also said five public share offerings, as well as two funds, would be listed this year.
“The first IPO (initial public offering) will be at the end of May,” he said yesterday, adding that prewar plans to list Libya’s two cellular operators, Libyana and al Madar, would go ahead next year.
“A lot of foreign companies have called about Libya’s stock market,” he added, saying interest had come from the Middle East, Europe and the US. Asked about yesterday’s slow start, Karoud said: “People are afraid, for now they want to see what happens.” – Reuters