As mentioned in the second part of Venture Kapital, the Amman Stock Exchange has lost a lot from having two of Jordan’s biggest companies go public outside:
Hikma (HIK.L) has a market cap of 5.86 billion GBP.
Aramex (ARMX.UH) has a market cap of 5.446 billion AED.
As of 09/08/2021, the combined market cap of both companies would be 6.78 billion JODs. The Amman Stock Exchange (total combined) market cap is 15.186 billion.
Had both companies been listed on the ASE (assuming market cap remaining the same as today), the ASE would grow by 44.6%.
To be fair, there is better regulatory compliance, corporate governance and more transparency to investors, which means better access to foreign capital when listing outside.
But assuming the Amman Stock Exchange manages to fix many of its issues (a topic for another newsletter), let’s look at which other companies in Jordan have the greatest potential and could benefit the most (both for investors and the company alike) by publicly listing in the ASE.
Most companies on the list are privately owned family businesses. They are approaching the 3rd generation in the family as most have been established in the past 50 years. And as we all know, family businesses tend to die from the “3rd generation curse” (1st generation founders, 2nd generation builds, 3rd generation destroys). So maybe a public listing could not be a bad idea.
Here are my top 10 personal choices:
Tahboub is well known in the market for wood works in the kitchen and bedrooms just like its publicly traded competitor JWICO (WOOD.ASE). However the Tahboub group has also many subsidiaries including automobile dealership and electronics dealership. Unlike the 3rd generation curse, kitchen installers need to fear the public listing curse: JWICO was a family business owned and run by the Qubain family who gradually lost control of the board and management. Maybe a solution to potential companies would be to keep a large majority of shares, similar to Manaseer.
Ticker suggestion: THBB or NTWD (not wood)
Another well known family brand focused on chemicals and personal hygiene (with its most famous product HiGeen). This company should’ve gone public in 2019, as this would’ve been a superstar stock during the 2020 lockdown and pandemic. I am sure the company’s sales have gone through the roof especially when they added new products such as masks and store front disinfectants.
Ticker suggestion: SKTN or HGEN
Similar to Sukhtian, Nuqul deals in the same sector of consumables. They make FINE toilet paper, its most famous brand. With the crazy headlines of toilet paper shortages in 2020, had Nuqul group gone public before, its stock would have skyrocketed too. They also compete with Sukhtian by producing masks and disinfectants.
Nuqul also owns various other companies such as office supplies and automotive dealerships.
Ticker suggestion: FINE or NQUL
Why isn’t this company not yet listed?? It fits perfectly well with the trend of fintech companies in the region. And it had asked various firms in Dubai for financial assistance a few years back. This company would’ve been the perfect candidate for IPO.
Ticker suggestion: PRGS, PSFT (similar to Microsoft’s MSFT and not Masafat) or BANK
Some claim this is a controversial company for having a “secret” investor behind. Hogwash to all rumours. I personally don’t drink from it but it seems to be a good brand. It could use the cash to expand operations, maybe acquiring local retail stores like Dimitri’s and maybe acquiring Coffee bean farms (ESG and all that).
Ticker suggestion: QHWA or AMED
The two Kasihs
Kasih 1 and Kasih 2 seem similar but are two different companies operating in the same sector. They should probably merge by keeping their brand logos separate.
Ticker suggestion: KSIH
The ASE lacks a lot of companies in the industrial sector. Investors need to diversify their portfolios a bit. This one could be a good suggestion. With climate change on the way and world politicians incapable of doing anything, the world will definitely be 2-3 degrees higher. Investing in a company that manufactures ACs is the way to go (this would be under the “Worst case scenario” fund).
Ticker suggestion: COOL or PTRA
Good local brand, support Made in Jordan.
Ticker suggestion: FOIL
Post office
Just like most airline carriers, the post office is somewhat of a national treasure. But it is becoming somewhat useless. With DHL acquiring Deutsche Post and with the Royal Mail going public, I think this could go well. The Post office is a loss making1 entity for the government, but privatising it through IPO could bring in more cash (perhaps). IPO funds could be used for expansion, better service, green mail trucks etc.etc.
Ticker suggestion: POST or MAIL
Umniah
Why isn’t this company listed? Orange is (JTEL:ASE), why not this? Local brand all the way. Can acquire Damamax and others… Come on…
Ticker suggestion: UMNH or MOBL
Electricity companies
This is a big issue that won’t be covered in a few sentences. Jordan has electricity producers and distributors, wind farms and solar farms and apparently costs keep rising and still making losses. The government should find a way to do an IPO to get rid of the debt.
Ticker suggestion: DEBT
That is it, many other companies could have been on this list but if you have any comments or suggestions, please share them. I especially want to see funny ticker suggestions.
Maybe newly publicly listed companies can have some sort of an incentive for potential shareholders: just like AMC in the USA where you get free popcorn for being a stock owner, some companies can do the same here.
http://gbd.gov.jo/uploads/files/gbd/law-gu/2021/en/8154.pdf