Enab Baladi – Jana al-Issa
After a hiatus of more than six months, the Syrian Ministry of Finance reopened the Damascus Securities Exchange for trading on June 2, with official government presence and participation from numerous businessmen, investors, and traders.
Finance Minister Mohammed Yosr Bernieh stated during the reopening event that this move is a message that the Syrian economy is beginning to move and recover, considering that the exchange will become a private entity and a genuine center for developing the economy and keeping pace with digital developments.
The minister explained that the state’s economic vision is based on justice, fairness, fostering the private sector, and attracting investment, adding that the ministry will work on facilitating operations, given the promising investment opportunities.
The Damascus Securities Exchange ceased operations on December 5, 2024, due to the instability of the banking system, coinciding with the downfall of Bashar al-Assad’s regime.
The Damascus Securities Exchange was established under Legislative Decree No. 55 of 2006 and enjoys legal personality, as well as financial and administrative independence. By this status, it has the authority to own and manage movable and immovable property, conduct all legal actions to achieve its objectives, and has the right to litigate.
The exchange aims to provide a suitable environment for facilitating investment and employment of funds, securing the necessary capital to expand economic activity by solidifying the principles of sound, clear, and fair trading of securities.
Decline in performance: 18 companies trading
Before the downfall of the Assad regime, the performance of the Damascus Securities Exchange was significantly impacted in recent years for political and economic reasons. Additionally, the Western sanctions imposed on Syria affected trading on the exchange due to regulatory and technical reasons.
The lack of transparency from companies and banks, the restriction of investment to specific companies and sectors, the absence of a Securities investment culture, and the scarcity of information about this economic sector contributed to distancing investors from investing in the Damascus Exchange.
Syrian Finance Minister Mohammed Yosr Bernieh confirmed that necessary measures have been taken to ensure compliance in combating money laundering operations and preventing criminals from exploiting the market, noting that all data of the Damascus Securities Exchange, the central depository, and shareholders’ ownership are preserved and enjoy the highest degrees of protection.
According to Bernieh, trading in the market will initially be limited to three days a week.
The number of listed companies in the Damascus Securities Exchange is 27, of which 18 joint-stock companies resumed trading this week, while the other companies did not meet the trading reinstatement criteria issued by the Syrian Commission of Financial Markets and Securities. Their shares will be resumed as soon as they meet the standards.
Improvement in company financing
Regarding the impact of the reopening of the Damascus Securities Exchange, its Executive Deputy Director, Dr. Suleiman Moussalli, told Enab Baladi that there are several effects, the most notable of which is the factor of trust and psychological factors indicating a return to economic activity in the country. The exchange has become Syria’s gateway to the world due to the presence of foreign shareholders and investors.
Moussalli believes that family businesses or private joint-stock companies will begin to consider becoming public joint-stock companies entering the financial market, leading to improved company valuations, increased investor interest, and enhanced ability to finance their activities from the financial market at lower interest rates. This allows companies to operate in a healthy environment that provides low-cost funding sources, thereby ensuring increased profits and improved performance.
For his part, member of the Syrian Economists Association, Hussam Abu Omar, stated that the reopening of the Damascus Securities Exchange, after a six-month hiatus, would have a positive impact on the Syrian economy. This reopening holds special importance as it coincides with the beginning of the lifting of American and European sanctions on Syria, which is expected to accelerate the recovery of the financial market.
The reactivation of the Damascus Securities Exchange is expected to create a more attractive legal and regulatory environment for the establishment of joint-stock companies, according to Abu Omar’s statement to Enab Baladi, especially in light of the obstacles that existed in previous periods, which deprived the Syrian economy of this type of companies due to the absence of institutional conditions, most importantly the existence of an active stock market linked to regional and international financial systems. Revitalizing the market is a key step towards enabling Syrian companies to expand regionally and possibly globally in the long term.
The member of the Syrian Economists Association indicated that market activity declined significantly after 2011, and even before the downfall of the previous regime at the end of 2024, due to the policies in place at that time and the international sanctions imposed.
Reliance on foreign capital
According to member of the Syrian Economists Association, Hussam Abu Omar, the Damascus Securities Exchange is likely to witness increased interest; however, there are challenges related to the awareness level of local investors and their culture regarding the importance of trading in financial markets and the potential returns. Hence, there is significant reliance on foreign capital and investors from the Syrian diaspora abroad to contribute to activating this market.
Abu Omar added that currently it is difficult to provide accurate estimates of the expected investment volume, especially in the short term, but initial indicators reflect a promising climate that necessitates efforts to raise investment awareness among citizens and provide a transparent and safe regulatory environment to ensure the sustainability of growth in this vital sector.
Shareholders: Unattractive bureaucracy
Deputy Executive Director of the Damascus Securities Exchange, Suleiman Moussalli, stated to Enab Baladi that the regulatory body of the market, represented by the Syrian Commission of Financial Markets and Securities, has been working from day one of Syria’s liberation to develop legislation to attract foreign investments, facilitate the inflow and outflow of capital, and introduce new financial instruments such as investment funds and sukuk. These measures provide financial tools that enable foreign investors to enter the Syrian market while ensuring reassurances regarding the possibility of withdrawing funds whenever deemed appropriate, thereby increasing interest in the market.
A survey conducted on a sample of shareholders’ and traders’ opinions in the Damascus Securities Exchange revealed that most of the legislations and laws regulating trading procedures are characterized by bureaucracy and lack modern updates, which negatively affects the market’s efficiency and its attractiveness for investment, as noted by member of the Syrian Economists Association Hussam Abu Omar.
In light of that, shareholders presented significant legislative suggestions that could enhance the working environment in the market, which include the following:
Allowing the opening of accounts and trading from outside Syria to attract foreign investments and expand the base of investors. Enacting laws that facilitate the withdrawal of funds from banks and prevent the withholding of liquidity from shareholders, which would enhance their trust in the financial system. Issuing legislation to limit monopolies and protect small investors, ensuring a more just and balanced market environment. Increasing transparency by updating administrative procedures and enacting clear laws that ensure clarity and accuracy of information. Tax exemptions for new investors for a specified period, encouraging market entry and stimulating trading activity. Promoting the market through all possible advertising means, especially through television programs that spotlight the market and its activities. Launching periodic economic bulletins covering the conditions of listed companies’ shares to provide accurate information to investors. It would be beneficial for the Syrian government to form a specialized committee to review current laws and procedures and update them to match the developments in the global stock market.
Steps to overcome bureaucracy in Damascus Securities Exchange Enab Baladi.
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