Syrian Bourse Prepares for the Worst

Syria's stock market prepares for gloomier days ahead, including the purchase of equipment to ensure continuity of trading, as well as allowing for delays of financial reports from companies, writes Hadeel al Sayegh of The National.

Officials at the bourse in Damascus are buying batteries, computers, and other essential portable infrastructure equipment in an attempt to ensure trading will continue in the event of a large-scale emergency, such as an aerial bombardment or military attack.

"We are living not knowing if we can come back tomorrow. Our job is to offer our services to the investors and go back home. It is hard watching things slowly deteriorating and dying," said Anas Jawish, the listing and operations director at the Damascus Securities Exchange (DSE). "This is our work, our life, slowly vanishing away."

The exchange advertised a tender to purchase batteries, in an effort to ensure that generators are able to provide power in the event of an extended electricity blackout and a shortage of fuel during an emergency. The tender offer expires Sunday, according to documents seen by The National.

"If we cannot come to work one day, the fuel in the generator can last one or two days at best," said Jawish. "We will have to use batteries as an alternative."

The exchange is also looking to purchase IT infrastructure to operate and back up investor and market data to be stored both in Syria and abroad.

"It will allow us to operate the exchange from our homes, if God forbid we come to the day where we cannot go to work," said Jawish.

"This is our rights, our wealth, our investors' rights. We have a duty to protect it."

Listed companies, meanwhile, have been granted a one-month grace period to report third-quarter financial statements, allowing for more time to collect data as the country descends further into civil war.

"We expect companies to begin reporting by mid-November. The reason being is that banks and companies have many branches, and are struggling to communicate with each other and bring the data together," said Jawish. "Some of them are operating in bad and violent areas—hot spots."

Last month, Syria International Islamic Bank, the largest shareholder of which is Qatar International Islamic Bank, said it had been targeted in a robbery in Homs resulting in the loss of 75.2 million Syrian pounds ($1.06 million). Banque Bemo Saudi Fransi, backed by Saudi Arabia's fourth-largest lender by market cap, said it had incurred losses from fraud and forgery totaling 25 million pounds in a separate filing.

"Bashar Al Assad is trying to provide whatever degree he can to sustain his support from the business community," said Anthony Skinner of the Maplecroft risk consultancy firm. "There is a practical explanation to the delay, but he is also trying to make some kind of concessions for the commercial community who have done really well in previous years under his support."

There are 20 stocks listed on the DSE, 12 of which are banks, with the rest from the insurance, services, industrial, and agriculture sectors.

Trading on the Damascus exchange has almost halted in recent months, as violence escalates in the capital and other cities across Syria. But exchange officials say they remain committed to offering investors a place to trade their holdings.

The DSE General Index has lost 40% of its value since the uprising that vowed to topple Al Assad's regime.

The IMF has not provided figures on the Syrian economy since the start of violence. "We are seeing the conflict show a stalemate of some sorts, with the Free Syrian Army and the government each making advances," said Skinner. "So economically speaking, it's a disaster."