Following the expectations that the Federal Reserve will
Slow start as Libyan bourse reopens
18.03.2012 by Rana Khalifa
While Libya is far from having a stable political situation, the stock market in Tripoli reopened Thursday. It had been closed for over a year due to the revolution against the Gaddafi regime.
According to the bourse director general, Ahmed Karoud, a dozen companies are listed with a total capitalization of US$3.1 billion. However, at the close of the first trading session, only 452 shares of Commerce and Development Bank were sold, with a total value of 11,752 dinars ($ 9,300).
According to Karoud, this opening “tells the world that Libya is now a stable country where the economy recovers.” Karoud has also suggested that Libya hopes to become a financial hub linking Europe to the rest of Africa.
He indicated that the stock market of Tripoli has been modeled on that of Abu Dhabi. It already has a branch in Benghazi in the east, the country’s second largest city, and hopes to establish an electronic trading system in the coming months.
But despite his optimism, things could be far from simple. The Chairman of the Board of the Exchange, Mohamed Fakroun, has meanwhile said that the market would soon be opened to foreign investors, who could hold up to 10% of the shares.
Currently, listed companies are primarily from the financial sector, being composed mainly of banks and insurance companies. ”All listed companies receive a tax exemption of five years,” said Mr. Fakroun. According to him, an Islamic fund and real estate company are planning to carry out IPOs in June. The two public mobile phone companies, Al-Madar and Libyana, could also soon knock on the door of the bourse.
The Stock Exchange in Tripoli had closed late February 2011, after the start of the rebellion that led to the overthrow and death of Muammar Gaddafi.
Since opening a few years ago, it failed to achieve the success anticipated due to a climate of general gloom, especially in the absence of confidence and transparency in the financial system under the old regime.
Karoud indicated the old premises of the bourse were seized in June 2011 by a pro-Gaddafi brigade and employees had to transport the documents in their private cars to prevent their destruction.