Libya bourse sees trading resumed next month
The head of Libya’s stock exchange is confident that the country’s stock market will be ready for foreign investors in one month.
September 26, 2011 12:20 by Reuters
Libya’s stock market will be ready to resume trading in about one month and hopes to attract more foreign investors, the head of the exchange’s Benghazi branch told Reuters on Sunday.
Trading in the market, which used to operate in Tripoli and Benghazi simultaneously, has been halted since Feb. 17, the day an uprising started in Benghazi which months later forced Libyan leader Muammar Gaddafi from power.
The exchange only had 12 listed companies and trading volumes were small, but the resumption of trading would send a signal to investors that Libya is starting to function again after its civil war.
“We would be ready to resume trading after a month,” Nagib Abdel Salam Obeida told Reuters in an interview.
“We need first to be in touch with listed companies and traders to inform them about the situation, and work to avoid a new crash in the market on the opening day,” he added
“By then we would be ready to open if the infrastructure is repaired and the link with the Tripoli market is established again,” he said.
He acknowledged the need for reforms if the stock market is to reach its potential. Under Gaddafi, Libya was touted as having the potential to become a Dubai-style financial hub but corruption and arbitrary rule changes frightened off investors.
On the day trading was suspended, the exchange, which featured mostly banks and insurance companies, had a nominal capitalisation of 3.94 billion Libyan dinars ($3.152 billion).
“The stock market under Gaddafi was just cosmetic,” said Obeida. “We tried hard in the days of Gaddafi to convince companies working in profitable sectors to list in the market, but they didn’t heed our calls.”
Libya’s two mobile telephone operators, Libyana and Al Madar, were frequently linked to stock market listings but these never took place. Both firms were under the de facto control of Mohammed Gaddafi, the Libyan leader’s oldest son.
Obeida said in order to attract foreign investors to the bourse, restrictions on repatriating earnings, a frequent concern among investors under Gaddafi, would need to be eased.
“The foreign investments in the market were limited,” Obeida said. “If we want to attract them (foreign investors), we need to show them how to get out if they want.” (By Emad Omar; Editing by Christian Lowe and David Cowell)