Algeria: Reforms introduced to encourage SMEs to enter stock markets
The Organising and Monitoring Securities Commission, with support from the United Nations Development Programme, announced this week that measures will be introduced to modernise and boost the Algerian stock market.Among these reforms are plans to encourage small and medium enterprises (SMEs) to enter the stock market as a way of diversifying their financing sources and broaden the number of companies listed, according to the director of the stock exchange, who was quoted by La Tribune newspaper.
Firstly, the Alger Stock Exchange will create a dedicated structure for SMEs, which will be operational in 2012.
Requirements will also be relaxed and the number of shareholders needed to enter the stock market has been reduced from 300 to 50.
Furthermore, SMEs will only have to list ten percent of their capital on the market, as opposed to 20 percent for large corporations.
The financial markets also present the characteristics of a viable alternative for SMEs.
Finance specialist Seydina Tandian told Sud Quotidien newspaper that they create international awareness, thus offering the company the chance to leverage funds at a better cost than that offered by banks.