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Viewing cable 09TRIPOLI274,

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Reference ID Created Released Classification Origin
09TRIPOLI274 2009-04-02 16:04 2011-01-31 21:09 CONFIDENTIAL Embassy Tripoli
VZCZCXRO7939
PP RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHTRO #0274/01 0921636
ZNY CCCCC ZZH
P 021636Z APR 09
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC PRIORITY 4679
INFO RUEHLO/AMEMBASSY LONDON PRIORITY 1040
RUEHFR/AMEMBASSY PARIS PRIORITY 0726
RUEHEE/ARAB LEAGUE COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHVT/AMEMBASSY VALLETTA PRIORITY 0411
RUEHRO/AMEMBASSY ROME PRIORITY 0512
RUEHTRO/AMEMBASSY TRIPOLI 5206
C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000274 
 
SIPDIS 
 
STATE FOR EEB (EGAN) AND NEA/MAG; ENERGY FOR GINA ERICKSON, 
COMMERCE FOR NATE MASON; CAIRO FOR TREASURY LIAISON ALEX 
SEVERENS; LONDON AND PARIS FOR NEA WATCHERS 
 
E.O. 12958: DECL: 3/31/2019 TAGS: ECIN ECON EINV LY EFIN

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 TRIPOLI 00000274 002.2 OF 002 stock exchange is an ambitious start. End comment. CRETZ