 MOVEMENTS IN THE FINANCIAL SECTOR |
A necessary requirement to attract international investment is financial security and stability. In order to better regulate the market and increase transparency, a new Securities Law was passed and in 1999 the new Amman Stock Exchange was inaugurated as an independent and private body.
The Amman Stock Exchange meets strict international guidelines for trading, listing and auction of securities, and it has also begun to adopt an Electronic Trading System to replace the old manual system currently in place. "The new trading system will ensure efficient and swift trading, along with more safety and better custody for stock exchange operations," said Mr. Jalil Tarif, CEO of the Amman Stock Exchange.
The banking sector is also undergoing reforms, driven by the recommendations of a private sector Banking Reform Committee created by King Abdullah last year.
Mrs. Suhair Al-Ali, General Manager of Citibank (Jordan) and head of the Banking Committee, believes that the legal framework is one of the main issues for the banking sector. "What needs to be accelerated is the number of new banking-related laws, like a new banking law and a new deposit insurance scheme law. Moreover, there is no leasing law and there is no trust law to enable securitization."
| Major reforms will be implemented in the near future, confirmed Suhair Al-Ali, in order to establish a strong financial framework and to support the development of Jordan's capital markets.
Taking a leadership role in the country's banking sector is the Arab Bank, a member of the Banking Committee and one of the largest banks in the Middle East. The Arab Bank was also rated among the top 200 international banks in relation to property rights.
The Arab Bank Group has been referred to as the anchor of the Jordanian economy, earning a net income of US$223.7 million in 1998 and posting total revenues of US$615.5 million. Established in 1930, the Arab Bank now has a world-wide network of over 350 branches and holds total assets worth around US$18.5 billion.
Abdel Majid Shoman, Chairman of the Arab Bank, said that the bank's main objective is "to support the economy of Jordan and to support companies interested in investing in Jordan." In fact, the Arab Bank was an important player in the privatisation of Jordan Telecom this year, collaborating with France Telecom to finalise the deal which totalled US$508 million.
Merging is one of the major issues in the banking sector today. In an effort to strengthen their position in the market, numerous banks in Jordan have openly voiced their intention to buy out or merge with other local banks.
Although the Arab Bank has not been actively looking to merge with anyone, Shoman added that "if any of the other banks wish to merge with us, they can come and discuss the matter with us. We will look it over and see if it is in our interest to merge with that bank." |
