Jordan's bourse resumed trading on Sunday after a two-month suspension with shares falling across the board, weighed down by investor fears the coronavirus pandemic will drag on the economy for months.
The Securities Exchange Commission (SEC) decided to reopen the market after it was suspended on March 16 to halt further declines amid financial turbulence as the crisis unfolded.
The bourse was one of only a few markets around the world to stop trading entirely, a move brokers said dented its credibilty with foreign funds.
After reopening, the bourse maintained a short trading session and reduced the daily price limit to 2.5 per cent from the 5 per cent limit that was introduced two days before the halt in trade.
The main ASE index closed 1.04 per cent lower at 1,650 points in thin trading which dealers and bourse officials attributed to a negative business outlook for the next few months before a slow recovery.
"The bourse mirrors the economy but we need a longer period for the market to return back to its balance," Amman Stock Exchange chief executive Mazen Wathaifi told Jordan's Al-Mamlaka TV public broadcaster.
Jordan's aid-dependant economy has been hard hit by the impact of the pandemic with a tight two-month lockdown to stem the spread of the virus that had hit revenues of many listed companies.
The economy is forecast by the finance minister and World Bank to contract by 3.5 per cent in 2020 compared to a government expectation before the crisis for 2.1 per cent growth. This would be the first contraction since 1990.
Market capitalisation has fallen to around 13.5 billion dinars (Dh69.9bn), levels unseen since 2005.
Following the reopening, leading shares dropped with only five shares rising as investors hurt by a central bank decision in March to freeze distribution of cash dividends sought liquidity.
"There were many shares that were offered at limit down and had no buyers. Many investors wanted to divest their shares to cash in," said Wajdi Makhamreh, an investment consultant
Arab Bank, which alone accounts nearly a quarter of the market's total capitalisation, fell 2.33 percent.
The market, which has been hurt by lack of institutional fund activity, has in recent years seen average daily trading activity fall to around 4 million dinars.
The absence of restrictions on foreign ownership has also increased the percentage of equity owned by foreigners to 50 percent of the market’s total capitalisation.
Dealers said there were no signs of any foreign funds divesting from bluechip banks and industrials.
The bourse also lifted curbs on the use and sale of treasury stock and allowed brokers more margin trading to minimise risks in the event the market falls further, brokers said.
