Amid unrest, Sudan’s bourse maps out expansion plans

Women work at the Khartoum Stock Exchange in Khartoum, Sudan. (File/Reuters)
Updated 13 November 2019

Amid unrest, Sudan’s bourse maps out expansion plans

  • Though still tiny, Sudan's trade volumes have risen steadily in local currency terms in recent years
  • Most trade in is a type of sukuk, or Islamic bonds, known as shahamas

KHARTOUM: In the small basement of a two-story building next to Khartoum’s central bus station, around 40 smartly dressed men and women gather around terminals for an hour a day with one eye on the future of Sudan’s fledgling financial market.
The stock exchange they work at managed to avoid a crash during the unrest that convulsed the country this year, toppling long-time ruler Omar Al-Bashir.
And now it has ambitions to expand once the government has stabilized an economy in crisis and ended the country’s isolation.
“With the changes that happened in Sudan we expect there will be big interest from non-Sudanese investors,” said the exchange’s assistant director Abdelrahman Majeed.
Though still tiny with a market capitalization of around 8 billion pounds at the end of 2018, its trade volumes have risen steadily in local currency terms in recent years. They increased to some 11 billion pounds ($245 million) this year from 9 billion for all of 2018, said Majeed.
It has also upgraded technology with Oman’s help and hopes to connect all brokers online soon, he said. Currently only one brokerage can trade real-time online, traders say.
Most trade in is a type of sukuk, or Islamic bonds, known as shahamas. On the three days that Reuters visited the bourse, few of the 68 stocks moved.
Some foreigners, notably from the Gulf, have bought into the market but many have struggled to repatriate their investments since the 2011 secession of South Sudan, which took away most of Sudan’s oil wealth and caused hard currency shortages, dealers say.
The civilian government appointed in April plans to set up investment body to review investment regulations, Finance Minister Ibrahim Elbadawi told Reuters.




Women walk out of the Khartoum Stock Exchange in Khartoum, Sudan. (File/Reuters)

This will encourage higher volumes once economic reforms have been enacted and inflation brought down, he said, adding that the government hoped the United States would remove Sudan from its list of state sponsors of terrorism.
DIVERSIFICATION
For Dima Awad, General Manager at Sudan’s biggest brokerage Sanabel Securities, the market also needs to offer a greater range of tradeable products, given many foreign investors are not interested in sukuk.
“We need to develop ...first the infrastructure (and) secondly we need new products,” she said.
.”..We need the government to give more support... have a vision, on what technologies we need, how can we connect to Gulf markets.”
Her brokerage is part Bank of Khartoum, the biggest local bank whose owners include several Gulf lenders.
Meanwhile authorities expect to issue 4 billion Sudanese pounds ($89 million) of sukuk this year. They are the main investment tool for banks and the public and offer a chunky annual profit rate of between 17 and 20%.
Osama Elnour Saeed, an official at the Sudan Financial Services Co. which issues sukuk on behalf of the government, said the last issue was oversubscribed as some investors were betting USsanctions would be lifted.
But a financial source said banks had invested excess liquidity after the central bank printed more money to address a cash crisis.
($1 = 44.9952 Sudanese pounds)


China's aviation regulator raised concerns with Boeing on 737 MAX design changes

Updated 12 December 2019

China's aviation regulator raised concerns with Boeing on 737 MAX design changes

  • China is reviewing the airworthiness of the plane
  • China was first country to ground plane in March

BEIJING: China’s aviation regulator raised “important concerns” with Boeing Co. on the reliability and security of design changes to the grounded 737 MAX, it said on Thursday, but declined to comment on when the plane might fly again in China.
China is reviewing the airworthiness of the plane based on proposed changes to software and flight control systems according to a bilateral agreement with the United States, Civil Aviation Administration of China (CAAC) spokesman Liu Luxu told reporters at a monthly briefing.
He reiterated that for the plane to resume flights in China, it needed to be re-certified, pilots needed comprehensive and effective training to restore confidence in the model and the causes of two crashes that killed 346 people needed to be investigated with effective measures put in place to prevent another one.
China was the first country to ground the 737 MAX after the second crash in Ethiopia in March and had set up a task force to review design changes to the aircraft that Boeing had submitted.
The US Federal Aviation Administration (FAA) will not allow the 737 MAX to resume flying before the end of 2019, its chief, Steve Dickson, said on Wednesday.
Once the FAA approves the reintroduction into service, the 737 MAX can operate in the United States, but individual regulators could keep the planes grounded in other countries until they complete their own reviews.
“Due to the trade war, the jury is still out on when China would reintroduce the aircraft,” said Rob Morris, Global Head of Consultancy at Ascend by Cirium.
Chinese airlines had 97 737 MAX jets in operation before the global grounding, the most of any country, according to Cirium Fleets Analyzer.