DAMASCUS, March 11 – Syria launched its first stock exchange on Tuesday after years of delays, in the latest step to liberalise the country\’s largely state-controlled economy.
Finance Minister Mohammed al-Hussein rang the trading bell at a formal launch ceremony for the Damascus Securities Exchange, which will be open for trading two days a week.
Trading will take place on Mondays and Thursdays, the official SANA news agency said, dealing in shares of four banks, an advertising company and a transport firm. Four other companies will soon also be trading.
The DSE was launched in the Barzeh district, within Syria\’s financial markets and securities commission. Its final home is to be the upmarket business district of Yaafur.
The new stock exchange was set up as part of an economic liberalisation programme aimed at attracting foreign investment and freeing up of the private sector in Syria.
The measures were launched when President Bashar al-Assad\’s Baath party officially adopted plans for a "social market economy" in 2005.
"The DSE was a dream and now has become a reality despite the fears and sceptism of some, given the backdrop of the failures of the Arab and world stock exchanges in the wake of the current financial crisis," SANA said last week.
The finance minister said in February that Syria was facing a "very difficult year."
Drought, falling oil exports and losses by state-owned industries are aggravating the impact of the global credit crunch in Syria, which also remains under US economic sanctions.
An economy ministry study forecasts that the credit crunch will cause a 30 percent drop in foreign investment, along with price increases plus a fall in remittances from Syrians working abroad, worth 850 million dollars in 2008.
Analysts also highlight the plunge in the price of crude, Syria\’s main source of income, and a fall in all exports. These sank by half in the final months of 2008 and could weaken again in 2009.
Syrian crude production dropped 2.8 percent last year and was down 7.6 percent from 2007, the Middle East Economic Survey reported.
Its manufactured products are no longer seen as competitive with goods from China, India and South East Asia, especially following the scrapping of government subsidies.
And most state-owned businesses, which are a drain on public finances, operate on losses or just break even.