(MENAFN - Jordan Times) Experts on Monday played down the impact of precautionary seizure of Taameer Jordan Holdings movable and immovable assets on Amman bourse.
However, they said the seizure of the company's properties sent a "very negative" signal to investors at a time the bourse is already affected by the unrest in Egypt.
On Sunday, Taameer Jordan Holdings, a real estate development company with a capital of about JD212 million, said it received a notification about the seizure by west Amman Court of First Instance. The court decided to impose a precautionary seizure on Taameer's assets after a former legal consultant at Taameer sued the company for outstanding dues worth of JD550,000 in return for legal services he provided to the company,
The company said in a disclosure on the Amman Stock Exchange (ASE) website that the company has started taking legal measures to end the seizure.
The company added that the seizure will not affect the company's projects and work.
"The drop of the ASE index Monday has nothing to do with the news about Taameer because the case does not entail a large amount of money," Jawad Kharouf, president of the Association of Certified Capital Market Professionals, told The Jordan Times Monday.
According to a broker at the Amman bourse, about 1.135 million shares for Taameer company were offered for sale on Monday of which about 194,000 shares were offered for sale on limit down, which is the maximum allowed percentage for lower trading prices.
Kharouf, who urged for addressing the situation of financially-troubled companies in the ASE, said he expects more seizures on properties and assets of other companies during 2011 as long as the financial situation of such companies is not addressed.
"In 2010, we have seen seizure on assets of members of boards of companies and heavyweight investors and now there is the seizure on Taameer, a public shareholding company. If no solution is found for stumbling companies, we will see more companies falling," Kharouf warned.
Economist Hosam Ayesh echoed similar remarks.
"Taameer was an engine for the Jordanian real estate sector and it has many projects. The news about the seizure of its movable and immovable properties certainly sends a negative message to investors," he said.
The economist, who expects more companies in 2011 to witness similar cases, said: "There are many companies that emerged during the boom in Amman bourse. These companies were not created based on well-planned studies and therefore such companies are most likely to suffer."
The experts added that the Amman bourse is already impacted by the unrest in Egypt, adding that "anxiety" exists among investors.
The political and economic conditions in the region are not stable and this is a main factor that contributes to the decline in Amman bourse," Kharouf said.
A broker, who preferred anonymity, said Monday "I have received tens of orders to sell Taameer shares at any price available. No one was buying the shares and overwhelming majority of those who wanted to sell are small investors who are always affected by any news or rumours they hear."
On Monday, the share price index closed at 2,398.15 points, dropping by 0.61 per cent.
Out of 154 companies trade, the share prices of 42 companies rose and the share prices of 74 declined, accoridng to the ASE website.
According to ASE daily report, the top five gainers were the Union Tobacco & Cigarette Industries by 4.88 per cent, Al Barakah Takaful Co. Ltd. by 4.76 per cent, Alshamekha For Realestate And Financial Investments by 4.74 per cent, Arab Electrical Industries by 4.65 per cent and Ihdathiat Co-ordinates by 4.63 per cent. The top five losers were Arab Orient Insurance Company by 5 per cent, Jordan French Insurance by 5 per cent, United Arab Investors by 5 per cent, The Investors And Eastern Arab For Industrial And Real Estate Investments by 4.92 per cent and Jordan Dubai Islamic Bank by 4.84 per cent.
By Mohammad Ghazal