Skip to comments.Arab bourses eye expats to spur trading
Posted on 05/24/2005 1:06:46 AM PDT by nickcarraway
'One way to expand the number of traders is to enhance the use of online trading'
BEIRUT: Lebanese and Arab stock exchanges should reach out to millions of expatriates around the world to boost trading in local stock exchanges, Economy, Trade and Finance Minister Damianos Kattar said on Monday. "One way to expand the number of traders is to enhance the use of online trading. This method will surely encourage Arab expatriates to buy and sell stocks," Kattar told a conference on Arab stock exchange in Beirut.
According to the minister, the Beirut Stock Exchange (BSE) will have an additional one million traders once the bourse is logged on to a special internet Web site.
He added that the government has already passed a law on electronic trading and this law will be implemented soon.
Kattar reminded participants that there are millions of Lebanese expatriates in Brazil and other parts of the world who are keen to contribute to the growth of their economy by trading in the local bourse.
"E-trading is the opening. We have already launched an e-commerce law and once the security system for online trading is implemented the number of traders on Beirut bourse will jump to one million very quickly," Kattar said.
Fadi Khalaf, the president of the BSE, said investors will be able to trade directly through the online service, adding that this step will improve the volume of trading and increase liquidity.
Most Gulf Arab states are already logged on to special on-line stock exchange Web site. Lebanon hopes to join the on-line Arab stock exchange Web site in the near future.
Despite noticeable improvement in the volume of trading last year, the BSE still lags behind several Arab bourses in terms of market capitalization and value of trading.
The market capitalization of the BSE is close to $3.5 billion compared to more than $100 billion each for the Kuwait and Saudi Arabia stock exchanges.
Real estate company Solidere controls almost 58 percent of trading in the BSE but Kattar expressed belief that this ratio may fall to 38 percent in the future as investors are showing more interest in other stocks.
The minister underlined the need for new regulations, higher transparency and more incentives to lure more companies to Arab bourses.
Kattar earlier proposed the creation of a special monitoring committee to supervise the activities of the BSE.
"We should also encourage small investors to trade shares in Arab bourses and this can be achieved by improving transparency," he said.
He added that the events of September 11, 2001, and the rise in oil prices have all helped improve Arab stock exchanges.
"We should give incentives to local and foreign firms to list their shares in Arab bourses," Kattar said.
Qatar and other Arab states have offered more incentives to foreign companies to join local bourses.
However, many Arab stock markets are still limited to local investors which limits the growth of these markets.
The director general of the Arab Stock Exchange Federation, Saefak al-Rurkaibi, said that Arab bourses achieved phenomenal growth last year.
He added that the combined market capitalization of the 12 Arab bourses reached $568 billion in 2004.
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