The Continuous auction system and Indicators of lack of Liquidity at Damascus Securities Exchange

Abstract

This article aims to discuss a number of lack of liquidity indicators at Damascus Securities Exchange, the contribution of the continuous auction system, the differences between it and the market makers’ system, and the advantages and disadvantages of each of them. To achieve this, daily data was collected from Damascus Securities Exchange website including trading volumes and the number of times the reference price is modified through out the years 2018 to 2020 in addition to the number of non-trading days and trading days of minimum transactions. The results indicate that there are a number of problems associated with the continuous auction system. The study reaches to a number of recommendations, the most important of which is the need to move to the market makers system or at least expand the price limits in order to increase trading volumes and achieve pricing efficiency at Damascus Securities Exchange.