Bloomberg News

Post-Qaddafi Libya Bourse Opens as 4 IPOs Seen by Year-End

March 15, 2012

Libya’s bourse, closed for more than a year as armed conflict ended Muammar Qaddafi’s four- decade rule, began trading of 10 stocks today and aims to list at least three more in 2012 as the economy stabilizes.

Libya’s LYX index was unchanged today as one trade of Commercial & Development Bank took place, General Manager Ahmed Karoud said by phone today. Average daily trading totaled no more than 400,000 dinars ($318,000) a day prior to the closing of the Libyan Stock Exchange in February 2011. The bourse is in talks with three to four companies in the real-estate and oil industries that are considering initial public offerings this year, and will announce their names next month, he said.

North Africa’s biggest oil producer has restored 75 percent of pre-war production levels, pumping as much as 1.2 million barrels a day, Prime Minister Abdurrahim el-Keib said this month. The economy, which the International Monetary Fund said in January may have contracted by 60 percent last year, is projected to recover in 2012, “concurrent with an improvement in the security situation,” the fund said.

“There’s stability in Libya,” Karoud said in an interview at his office yesterday. “The stock market will be one of the economic activities in the coming period in order to reconstruct Libya.”

Lack of Stability

The bourse, located in the capital Tripoli, remains small, with a market value of about $3.1 billion compared with $66.2 billion for the Egyptian market, North Africa’s biggest.

While the tumble in growth may have slowed, political tensions remain. Mustafa Abdel Jalil, the head of the National Transitional Council, said March 7 he is ready to defend national unity by force. His remarks came a day after political and tribal leaders declared a semi-autonomous region in the country’s oil-rich east.

“We are going to require more stability in the country -- this is a must,” Rami Sidani, the Dubai-based head of Middle East and North Africa investments at Schroder Investment Management, said by telephone yesterday. “We perceive Libya as a great place that offers great growth potential eventually but we believe it’s at a very early stage given the political uncertainty we see at the moment.”

Other companies that are trading on the exchange include Gumhouria Bank and Libya Insurance. The bourse plans to list by June two funds valued at a combined 750 million dinars that will help “participate in rebuilding Libya,” Karoud said.

Trading will start at 10:30 a.m. local time and last 90 minutes for five days a week. The shares are subject to a maximum daily movement of 3 percent, Karoud told Arabiya TV today. The exchange signed an agreement last month with the nation’s Commercial & Development Bank to become the bourse’s clearing bank, the Libyan news agency reported.

There are no restrictions on foreign investment on the market, Karoud said.

To contact the reporter on this story: Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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