Algiers Stock Exchange … A Trading and Business Graveyard!

It is no secret for many specialists in economics the salient importance of the exchange stock market and the significant role it plays in the spurring of the national economy, but this awareness is missing once you talk about this institution to ordinary citizens, some of them are even unaware of the existence of a stock exchange in Algeria and others happen to know it only through the façade of its grand edifice located at the Colonel Amirouche street in Central Algiers, where a large screen has been erected highlighting the daily trading prices.

As part of an investigative field assignment, “Echorouk” has decided to inquire and to move to the headquarters of this stock exchange institution and spend the day inside these trading and business premises and monitor transactions evolving from within. 

Although our prior knowledge of this stock  exchange was obvious for us but we decided all the same to ask some citizens about this institution, and we noticed on the faces of most of them a surprising and perplexing look once we cited its name, some pleading not to know at all the existence of a stock exchange in Algeria originally and others said they did not know anything about it.

Those citizens questioned didn’t also know that any citizen with a thousand dinars is able to buy shares in the stock market for example; the Pharmaceutical Company “Biopharm” sold to this effect their shares for 1,250 dinars per share.

We thus entered the Algiers stock exchange building and after passing through the reception desk, we went to the cabin, where the trading session held twice a week on Monday, and the second on Wednesday from 9h30 a.m to 10h15 a.m was nearing completion. 

The trading session was attended by the brokers in charge of the stock exchange operations who sat in small offices and watched closely their computers from which operations of buying and selling, were ongoing in the presence of the organizing and monitoring Committee members until the resounding of the bell terminating the daily trading sessions.

On the spot, we were told by the CPA Bank Representative that Banks remain the go-betweens between the customers and the companies in the process of buying and selling shares

We have taken a place beside the CPA representative at the Algiers stock exchange premises and we inquired about her role and task there.

She told us that she was in charge of buying and selling customers’ shares, all of them having two CPA bank accounts, one current and one private and when the trading shares’ operation is wound up, the latter converts the money directly to the current account for safe-keeping, and the process is carried out this way because the customer doesn’t  have the right to enter the stock exchange premises and always has to buy the vied shares from outside this trading and business institution notably through the banking channels.

The latter must secure the mediator’s approval for the information memorandum and await endorsement from the Securities and Exchange Commission, which is entitled to study and pinpoint if they can enter the stock exchange market, and also to determine the stock price, in consistence with the outstanding law of supply and demand as the price of a share could be up in the morning and in the evening it could drop and vice versa, she explained.

Information Officer at the stock exchange market: “Customers are barred from attending the trading sessions and the mediator is in charge of representing them”.

He further  informed us during our guided tour of the premises that the Algiers Stock Exchange like any other stock exchanges in the world is hinging on four basic structures: including the Securities and Exchange Commission, which sets the laws of the market, as well as ensures the conduct of stock market companies’ shares governing the entry of companies in addition the trading shares and information dissemination regarding the evolution of the market.

He  added in this line that the brokers entrusted with the exchange process are in charge of buying and selling on customers’ orders and are the only ones who can enter the stock exchange market while the fourth structure was established in 2004 and is the central custodian for the safe-keeping of securities.

The Information Officer also confirmed to us that the banks, which play the role of mediators, include all public banks, in addition to two private banks namely, “Societe Générale” and “PNB Paribas”, which duly attend the stock exchange trading sessions, allowing by proxy the customers to buy or sell coveted shares.

He also apprised us that there are only two public companies and three private ones represented at the Algiers Stock Exchange, meaning a glaring lack of interest by national companies in this lackluster business and trading institution.

Our interlocutor also affirmed that the buying and selling process is done through a system of computers and at the end of the process an official bulletin of the pricing and the results of the process is issued, stressing that the working method adopted by the Algiers Stock Exchange is still traditional. 

In other world countries, banks and brokers are trading via the Internet in a direct way, a system that the Algiers Stock Exchange is seeking to include in its daily trading and business operations within the next two years, he underscored.