Libyan Stock Market: Slow Foray into Privatization

Dr. Ahmed M. Karoud, General Manager of Libyan Stock Market, talks about the inception of the capital markets in Libya. The history of the stock exchange in Libya goes back to 2007 when a re-engagement of Libya with the international community began. The Libyan Stock Exchange was founded on the need for privatisation and enterprise, letting capitalism take its own course.

According to Karoud, the Libyan Stock Market began in June 2007 “with privatization of Libyan insurance companies; these were government companies until they were listed on the Libyan stock exchange. We have about 15 private sector companies listed on the stock exchange now, which include insurance companies, banks and investment companies. Also, the Libyan Stock Market is also listed on the exchange.”

Altought Karoud admids that over the next couple of years more privatization will take place, he does not see 2013 as a good year to privatize comanies. “we have a very new government with only one year and a half of being in power, so we are still in early stages for privatisation. This is a new Libya after the revolution. At the moment it is not the best time to privatise. We can’t do too much after just one year. We have to re-evaluate. Before the revolution Libyana and Almadar were supposed to be listed. The government estimated the value of the two companies at around LYD 8 billion.”

“Today, the ministry of communiation is re-evaluating the value of these companies. Now the government wants the company to investigate the capital, the company, the staff, and all sorts of things.” (Market capitalization is around LYD 4 billion)

With only 5% of our the economy in private hands, the government is going to set a new law for private companies in Libya.

Karoud admitds there are challenges: “We are looking for funding and now we have a new law for the stock exchange and central bank for this funding, because we don’t have any real funds. We have funds in Libya but they are not real funds. We are looking for real estate funds; they are the first thing we are looking for. We are going to give licenses for 3 real estate companies in 2013; these will be the first real funds in Libya. The government is communicating with the central bank to have a new law and committee for these funds.”

Future Developments:

In 2013, 3 real estate funds will list on the stock exchange worth LYD 1.2 billion. Two of the funds are worth about 500 million Libyan dinars and the other is worth 250 million Libyan dinar.

This transaction will raise the value of the stock exchange by almost 20%. Furthmore, in 2014, 28 companies are expected to list their shares in a variety of sectors such as real estate, tourism, oil and gas, etc.

FACTS AND FIGURES:

Libyan Stock Market (LSM)

Total number of traded securities: 13
Total number of listed (but not tradable) securities: 39
Total market capitalization of all listings: 4.2bn LYD (note: 1 USD = 1.25 LYD)
Average daily trading volume: LYD 80,000
Number of licensed brokers: 8
Custodial services: Offered by exchange, not by banks or brokers
Traded on exchange as of 1 April 2013:

Banks

Mediterranean Bank
National Commercial Bank
Trade & Development Bank
Gumhouria Bank
Sahara Bank
Wahda Bank(Jumhouria, Sahara, and Wahda account for more than 50% of the exchange’s total market capitalization)

Insurance

Deserts Insurance
Libya Insurance
United Insurance

Financial Services

Libyan Stock Market

Building Materials

National Union Engineering

See more: http://www.pathfinder.vc/2013/04/04/a-visit-to-the-libyan-stock-exchange/