INVESTING IN THE AMMAN STOCK EXCHANGE | HOW TO BUY STOCKS

How To Invest in the Amman Stock Exchange in 6 steps

  1. Pick a Broker: Brokers are the authorised intermediaries to trade financial assets on the Amman Stock Exchange.

  2. Open a Trading Account with a local broker: The only requirement is to be of legal age and have a residence in Jordan. The broker will provide you with access to their investment platforms, allowing you to send purchase and sale orders to the Amman Stock Exchange’s central system.

  3. Choose the Financial Asset to Invest in: The investor has to decide whether to invest in shares, sovereign bonds, or corporate bonds.

  4. After deciding, send a Buy order through the broker: This means that you have to submit a purchase order for a financial asset. It is possible to set a limit price or a market price of the selected asset.

  5. The financial transaction is effective when the buy and sell prices match: When the bidding price (the buyer) of a financial asset coincides with the asking price (the seller), the trade gets executed. The Brokers make the payment at the Stock Exchange in your name, and they deliver the transaction amount to the buyer/seller. You become the legal owner of the asset.

  6. The broker issues the transaction notification and charges fees: There is no fixed fee, which means that when choosing a broker to invest in the Amman Exchange, you will have to choose a broker that can better adapt to your investment strategy.

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How does the Amman Stock Exchange work?

The Amman Stock Exchange (ASE) was established in March 1999 and is authorised to function as a regulated market to allow financial securities trading in Jordan. On February 20, 2017, the ASE was registered as a public shareholding company fully-owned by the government under the name “The Amman Stock Exchange Company (ASE Company)”.

The ASE Company aims to operate, manage, and develop securities, commodities, and derivatives markets inside and outside Jordan. The ASE Company seeks to provide a healthy and secure environment to ensure the interaction of supply and demand forces for trading in securities in proper and fair trading practices and raising the awareness and knowledge of investing in the financial markets and defining the services provided by the ASE Company. To achieve its goals; the ASE Company sets its internal rules and regulations that will govern its management; also it will set the laws and regulations related to dealing in financial markets according to best international practices.

It’s worth mentioning that transformation the ASE to a company is expected to enhance the role that the ASE plays in serving the national economy, and will enable it to offer better services, attract new companies and new clients, as well as enter into regional and international agreements with various parties to increase its market share regionally and internationally.

In short, the stock exchange is the institution that facilitates the negotiation of financial instruments in Jordan. The supply of financial instruments such as stocks, bonds, currencies, and the demand for these instruments (i.e. investors) interact.

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The Stock Exchange holds daily “Trading Sessions”, for which it provides the physical, technological, human, and operational means that allow efficient communication between Brokers, Issuers, and Investors.

What is a Securities Issuer?

Issuers of securities are companies that seek to grow through raising capital at the Amman Stock Exchange. These companies raise capital by issuing debt (bonds) or capital (shares). Issuers of securities may be government-controlled entities or private companies, but no matter who owns the company, it is the issuer who backs the investment.

For example, if you invested in bonds from a private company, the company will be required to pay the principal and interests to the bond investors.