(MENAFN - Jordan Times) Stockbrokers said Tuesday the Amman Bourse may regress following a decision by the Jordan Securities Commission (JSC) to temporarily ban three "major" investors from trading in shares of banks and companies that have "influential" shares in banks.
They indicated that JSC's decision banning investors Saad Sadoun Mahmoud Bunnieh, Samer Ali Khleif Shawawreh and Naser Abdul Ghani Mahmoud and their relatives from trading in such companies and banks till further notice has already caused a decline in the share price index by 0.67 per cent amid a sell-off of shares of many companies.
"Preventing these heavyweight investors, whose portfolios worth millions, from trading is likely to result in a wide-scale dumping when the ban is over," a broker, who preferred not to be named, said, noting that the shares of many companies in which they trade have already hit the lowest level in Tuesday's trading as the announcement of the ban came in the mid of the trading session.
JSC spokesperson Walid Kheirallah said the decision was taken following signs of trading practices that are likely to harm investors in the Amman Stock Exchange (ASE) in general.
"The decision is temporary to ensure justice and curb speculations that would harm investors in the ASE," Kheirallah told The Jordan Times over the phone.
Several brokers said the decision would have "disastrous" impact on the ASE.
"The moment the JSC's decision was announced and the news spread, several investors started dumping shares of many companies and panic spread among them," another broker, who asked not to be identified, said.
A third broker said: "The JSC's decision was hastily taken and it is simply a show of authority as this is not the solution to deal with investors."
Out of 172 companies traded Tuesday, share prices of 112 companies declined.
Asked about the impact of the decision on the ASE, the JSC official said: "When the people are more aware of the decision and why it was taken, there will be no negative impact."
Companies covered by the decision and their trading symbols at the ASE are the United Arab Investors (UAIC), the Union Investment Corporation (UINV), the Jordan Worsted Mill (JOWM), the Jordan New Cable (JNCC), the Jordan Investment Trust (JOIT), the Middle East Insurance (MEIN), the General Investments (GENI), First Jordan Investment Company Plc. (FRST) , Arab Real Estate Development (ARED), the Taameer Jordan Holdings (TAMR), the South Electronics (SECO) and the Union Tobacco and Cigarette Industries (UTOB).
Also yesterday, the JSC's council of commissioners decided to suspend the work of three brokerage companies as of Wednesday until further notice.
The JSC requested the suspended companies, which are Shareco for securities, Indemaj for brokerage and Al Jazeera for Financial investment, to submit bank guarantees, according to the Jordan News Agency, Petra.
By Mohammad Ghazal