Algiers Stock Exchange « eyes » Algerians’ pockets to garner 1 billion dollars in 2016

The Algiers Stock Exchange has reopened for the first time since its closure 15 years ago, its doors to institutions and even to the general public by announcing a massive program meant to hike its turnover to one billion dollars by the end of the current year, and reach more than two billion dollars in a matter of about three years, so as to surpass even the Tunis Stock Exchange, which is one of the most active stock exchanges in the African continent.

The advanced drying up of financial public and banking resources, because of sustained downturn of the world oil market, has now compelled the government to reactivate the Algiers capital market.

Contented for long by the comfortable revenues from expensive oil, the state now seems compelled to consider alternative financing methods by seeking domestic savings through the Securities Exchange.

The Algiers capital market actually provides an advantageous alternative for the financing of the national economy, especially in view of the decline in bank liquidities, confirmed during the “El Moudjahid Forum” on Monday the CEO of the Management Stock Exchange Company (SGBV) Mr Yazid Benmouhoub.

Asked in this context about the involvement of SGBV in the preparation for the national bond that the state plans to launch in the month of April, the Director General of the Stock Exchange explained that in the current state of this process, the relevant protagonists of the stock market have not yet been formally requested to play a full part.

He said to this effect that such a loan must necessarily be open to a wide group of institutional and individual investors, as it must be listed on the stock exchange in order to actually be successful and garner spin-offs. 

According to Mr Benmouhoub, there is nevertheless a real savings deposit that will be drained by this important bonds’ issue, especially as it comes, he argued, from government securities accompanied by an enticing yield, thus making it a stock investment both safe and profitable.

As announced recently by Prime Minister Abdelmalek Sellal, the national mandatory bond that is planned to be launched by the state, indeed offers an interest rate of 5%, which should make it an attractive savings product, with a remuneration which will largely exceed that of conventional assorted bank deposits, with their interest rates not exceeding 2%. 

Anyway, as the government intends to use the bond market to raise the funds necessary to finance the various investment projects, this reflects both the severity of the crisis that weighs on public finances, but also  requires the commitment to harnessing other resources channels circulating outside conventional banking networks. 

In addition to this national borrowing operation, Mr Yazid Benmouhoub, also confirmed that the state is now keen to foster the opening of the capital of certain public companies through the capital market, as part of a plan to promote new bond issues, with a view to financing these large economic entities.