LIBYA'S STOCK MARKET: STILL SMALL BUT GROWING

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000274



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E.O. 12958: DECL: 3/31/2019

TAGS: ECIN, ECON, EINV, LY, EFIN

SUBJECT: LIBYA'S STOCK MARKET: STILL SMALL BUT GROWING



REF: (A) TRIPOLI 258; (B) TRIPOLI 212; (C) 07 TRIPOLI 397



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CLASSIFIED BY: Gene Cretz, Ambassador, U.S. Embassy Tripoli,

U.S. Department of State.

REASON: 1.4 (b),(d)

1. (C) Summary: The chair of Libya's newly-created stock

market, Suliman Alshahomy, briefed Ambassador on plans to expand

the stock market (currently 8 companies are listed),use it to

distribute shares in state-owned firms to poor families, and

create a television show to educate the public about investing.

Using state-of-the-art computer systems, the stock markets in

Tripoli and in Benghazi are connected in real-time. The

headquarters moved from Benghazi to Tripoli in July 2008.

Alshahomy welcomed the Embassy's help in seeking technical

advice from their American counterparts, such as the New York

Stock Exchange. End summary.



LIBYA'S STOCK MARKET: SMALL BUT GROWING



2. (C) Suliman Alshahomy, Chairman of the Libyan Stock Market,

told Ambassador on March 30 that he plans to expand the stock

market beyond the eight companies currently listed to eventually

include Jumhuriya Bank and a cement factory. He said the

state-owned companies currently being privatized (ref A) could

eventually be listed on the stock exchange. Alshahomy expects

20 other private companies in different sectors to be added to

the stock exchange. At present, only banks, insurance

companies, and the Stock Market itself are listed. The stock

market is self-regulated, although a draft law creating an

independent regulator is being considered by the General

People's Congress. Despite earlier reporting that the Stock

Market falls under the General Peoples Committee for the Economy

(ref B),Alshahomy said the Stock Market answers directly to the

Prime Minister "because it is a company."



SOME RESISTERS BUT AL-QADHAFI APPROVED STOCK MARKET IDEA



3. (C) Even though some people still resist the idea of a

stock market, Alshahomy told the Ambassador he personally

explained to Muammar al-Qadhafi why Libya needed an exchange to

diversify its economy and to move away from a state-owned

system. Alshahomy noted al-Qadhafi "said o.k." to the plan. He

said the stock market was even creating television "soap operas"

that would educate the public on investing and the merits of a

stock market. They are also using radio and television to

encourage Libyans to invest in companies.



DISTRIBUTING SHARES TO POOR LIBYANS TOO



4. (C) The stock market will soon distribute shares in

companies owned by the Social Security Fund to 184,000 poor

families in Libya. The stock market will list those companies

on a "second table" which will be separate from the "first

table" listing the regular companies outlined above. The

families will be able to receive dividends from the companies

but they will not be able to sell their shares for at least

three years. Alshahomy pointed out this program is separate

from the Wealth Distribution Program (WDP),which is still being

developed. He offered his personal opinion that al-Qadhafi's

vision of abolishing the government and distributing oil

revenues directly to the public would not happen for a very long

time. People were used to having some sort of government and

they would not want it to go away, he said.



U.S. TECHNICAL ASSISTANCE WELCOMED



5. (C) Alshahomy welcomed the Embassy's offer to help tap into

technical assistance for the stock market, including from its

American counterparts and experts in the U.S. Government. He

noted they had benefited from the advice of an American

consultant in setting up the stock market (ref C). He

appreciated the recent visit of a U.S. Treasury Department team

in February and invited them back to provide workshops on

anti-money laundering. He also liked the idea of a visit by

representatives of the New York Stock Exchange. (Note: In early

March, Alshahomy participated in a conference on investor

education organized by the Financial Industry Regulatory

Authority in Washington, DC. End note).



6. (C) Comment: The Chairman of the nascent Libyan Stock

Market enjoys high-level support for his efforts to create a

modern trading body. With only eight companies and a relatively

low volume of trade (around 200,000 dinars, equivalent to

160,000 USD),the stock exchange is relatively small. However,

considering the Libyan private sector is still quite small, the



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stock exchange is an ambitious start. End comment.

CRETZ