YEMEN'S STOCK MARKET, LONG-AWAITED DREAM

By: Ibtisam Alshafaq

Edited into English by: Tawfiq Alnadhif

SANA'A, Feb. 17 (Saba)-Since 2004, we have been hearing the Yemeni
officials announce about preparations for establishing stock markets
in Yemen, as it will play an important role in establishing a good
investment climate and will attract and mobilize savings besides
directing them towards the productive investments.

Alseyasia Newspaper prepared a special report investigates the
preparations and the practical procedures and steps for establishing
the stock market in Yemen or is it just talk for media consumption.

Before talking about the economic potentials and demands needed for
establishing the stock market in Yemen, lets us be a little closer
to see what the stock market is? The traditional definition for the
common market defines it as a place for sale and purchase.

The economic concept of market lies in being the place which brings
together buyer and seller to exchange a commodity or service. The
limited concept of the stock market on the place or the market you
are trading in currencies in different forms of financial stocks,
trading shares and securities or the financial checks that organized
by the laws and regulations and regulations to ensure complete
exchange of buying and selling quickly and easily as well as safely
if the stock market is a market trading in securities, buying,
selling, or are stock markets.

The Yemeni researcher Nabil Alolofi made a research in 2005 about
the necessary requirements to establish a stock market in Yemen and
the current conditions to establish such a market. The study came
out with some recommendations regarding the establishment of the
stock market and the most important ones are: to complete the
establishment steps of market which is identified in this study,
according to reports, identifying staff and training and
rehabilitating them, as well as continuing the program of economic
and financial reform and achieving positive results in reducing the
rate of inflation, budget deficit and trapping, and preserving
exchange rate stability. The study recommends also developing of the
banking system, encouraging the establishment of institutions of
financial intermediation, saving and investment, and supporting the
establishment of joint stock companies and encouraging investment in
securities.

Although the result of the study said that the situation is ripe for
establishing a stock market to become a component of the Yemeni
economic system based on the principle of economic freedom, we have
not seen a starting point for that market.

Many questions are aroused, why it was such a market and a question
to ask is Yemen qualified to have a stock market, like other
countries, starting with the President of the Malaysian
International Tontek University of Technology, Dr. Mohamed Mutaimi,
who indicates that the reason for delaying the establishment of the
market is due to the conditions in Yemen, adding that those
conditions imposed themselves strongly, leading to the Government
deferred consideration of the market until the end of these crises.

"Delay does not mean forgetting or rejection of such a market, but
needs requirements and conditions," said Mutaimi, adding there are
conditions of institutional, legal, financial and banking system in
Yemen need to be modified.

He further said there are reasons for the weakness of the
institutional development in Yemen and this makes a market in shares
and bonds in the absence of institutional capacity reasonably
effective barrier within the constraints that hinder the
establishment of the financial market.

Is Yemen qualified to have a stock market?

We asked the specialists of economic affairs this question so many
times. Although the statements of government officials suggest that
there are serious steps taken by the government for establishing
such a market, we raised the question early to Jalal Yaacoub, the
undersecretary of the Ministry of Finance for Foreign Affairs, the
one who is concerned about the market but and communicate with Abbas
Al-Basha, the Director of Stock Unit at the Ministry, who gave us
the details and clarifications on these questions.

Al-Basha says: "Efforts were made in 2000 to establish a stock
market and many studies were made also. All these studies indicated
the possibility of creating and launching this market in Yemen, of
course, needs exerting great efforts and there was a technical
committee studies for establishing a stock market. "

Despite these positive steps, Al-Basha acknowledges some
difficulties facing the market, including the absence of the well
qualified staff in the country to fill positions and conduct the
work in this body and therefore we are working in parallel with all
operations and other tasks for the establishment of the market. "We
are attracting, training and rehabilitation of cadres and a key part
of where we went to our brothers in the Arab countries to benefit
from their experience."

What Yemen needs to establish such a market?

The Undersecretary of the Ministry of Planning and International
Cooperation for Economic Studies and projections Dr. Mohammed
Alhaweri said that the requirements to establish the market needed
to reform the first step of investment. He said "I think is possible
get different requirements for establishing this market."

He also pointed out that the basic requirements for a stock market
and the available tools in Yemen such as the requirements of
economic and legislative requirements related to improving the
investment environment and the judicial requirements.