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Sun 7 Mar 2004 04:00 AM

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Holding out for a Syrian stock market

As Syria opens up its banking sector, a Damascus stock market could also be on its way.

Investors searching for business opportunities in Syria may soon have something to smile about. The Baathist state, which is in the midst of overhauling its banking and monetary policies, is tentatively looking at setting up a stock market of its own.

The recent promises of economic and political reforms began taking shape last month, with the first foreign private banks entering the country to improve the quality of services offered by the banking sector and encourage investors.

However, a source close to the Syrian Central Bank, who spoke on condition of anonymity, confirmed to Arabian Business that the country was in the process of setting up a new bourse. He claimed it was “in response to the requirements of developing the national economy and the country’s economic interests.”

While the establishment of private banks will increase the country’s economic activities and the state’s revenues, the government hopes that its economic reform programmes will get a further impetus with the establishment of a stock exchange. According to industry sources, it will lead to the integration of Syria’s stock markets with those of the Arab states.

But economists argue that the government should be focusing on banking and monetary sector reforms rather than launching a stock exchange. “The priority for the government at this stage should be to improve the banking sector,” says Dr Nabil Sukar of The Syrian Consulting Bureau for Development and Investment in Damascus.

“The stock market law can wait a while. [First] we need to introduce international accounting standards for companies along with well-defined disclosure procedures. “A stock market is necessary, but we should also focus on developing skills needed to operate the exchange before setting one up.”

After the decree issued by President Al Assad for the establishment of an investment bank, the Baath party’s regional leadership approved the establishment of private banks and the setting up of a stock market.

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