* Six companies listed on Damascus Securities Exchange
* Price fluctuations mostly limited to 2 percent a day
* Govt working on law to enforce intl acct standards (Adds detail)
By Khaled Yacoub Oweis
DAMASCUS, March 10 (Reuters) - The Syrian government launched a stock exchange on Tuesday that expands a cautious liberalisation policy, after nationalisation and state control undermined the economy over the last four decades.
"Today marks a new beginning, which signals Syria's determination to proceed with economic reform despite the global financial crisis," Finance Minister Mohammad al-Hussein said at the opening ceremony.
"We are confident that the bourse will encourage investment and help absorb capital and savings," Hussein said, hinting at previous restrictions that kept Syria mainly a cash economy and drove capital abroad.
Four banks, a publishing group and a transport firm are so far listed on the Damascus Securities Exchange. Price fluctuations are mostly limited to 2 percent a day.
Few trades were made on the first day. The bourse will initially be opened twice a week, every Monday and Thursday.
Hussein said a new law to force Syrian companies to adopt international accounting standards is being worked out and he expected it to encourage more listings, from the current six.
Foreign investors are allowed to trade shares, with limits on the percentage of shares they can own and on the repatriation of capital.
Bourse officials said the restrictions were part of a "better safe than sorry" policy to lessen speculation and maintain stability as the market takes off.
"Our target for now is the Syrian investor. There is a lot of liquidity in this emerging market and the process of attracting it will be accumulative," said Osama al-Ansari, a Syrian businessman who helped set up the bourse.
"Don't judge us in the first year or two," he added.
Poul Gadegaard, team leader of a European Union business support programme, said the stock exchange could help Syrian companies change an anachronistic business model based on a simple trading mentality and secrecy. "The bourse is another piece of the puzzle to develop Syria. When I first arrived here in 2001 one couldn't buy an electric kettle," he said, referring to bans on imports.
The government, which is under U.S. sanctions, is pursuing a policy of slowly opening the state-controlled economy begun by President Bashar al-Assad after he succeeded his father, Hafez al-Assad, in 2000.
The ruling Baath Party touted until a few years ago a doctrine of economic isolation and lack of a stock market as policy it said helped insulate Syria against global shocks.
Private banks were allowed back five years ago and foreign investors were invited to develop real estate projects and build cement factories, after housing shortages and a construction materials crisis deepened.
Other moves, such as allowing foreign investors majority shareholding in banks and the issuing of treasury bills, have been delayed.