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Palestine Stock Exchange is one step far from a global spread

2014-09-25

Sahem Weekly Trading Report [21-25/09[2014

There is no doubt that the eyes move, in 2014, with caution and hope in Palestine Stock Exchange PEX, given the unique entity of the Palestinian investment environment that is related to the local political situation, and by taking into account the PEX’s ability to isolate itself once again from any regional variations. The PEX started the year 2014 strongly, recording positive indicators supported by optimism that stems from the fundamental indicators built into the PEX from years, which were enhanced by the distinguished performance of the listed companies, enriched by the growth in the dividends distribution, strengthened by investments holding and conservatism against all obstacles and enlarged by any close political solution. In conjunction with the sustainable performance’ drivers of the PEX; hopes were raised to approach a merit for Palestine, following launching standalone indices by global companies in the last periods. While this week came with an announcement of a closer status. Palestine now is one step away from inclusion into Financial Times Stock Exchange FTSE Group, after meeting the required market criteria by the group and being added to the Watch List of Markets for possible addition- after one year- to Frontier Market Status.  

The PEX has passed the market required market criteria by FTSE, which includes: the existence of formal stock market regulatory authority that actively monitor the market, non-incidence of foreign ownership restrictions, non-significant restriction applied to the investment of capital, rare incidence of failed trades, competitive implicit and explicit transaction cost, efficient trading mechanism and high transparency. Thus, Palestine is subject to inclusion on the group’s indices in September 2015. Following this, inclusion on the Watch List will give greater momentum and wider global spread, given these indices’ ability to attract international investors’ attention and to prove the stock market’s status on the international stocks’ map. We might touch the positivity that will pour in the interest of the Palestinian Stock Market on the long run; nevertheless, this step crowns the resulted progress from the continuous development by the financial industry’s related parties in Palestine, and reflects the hope journey in the investment feasibly in the Palestinian equities. 

In another context, companies announce in this period dates for boards of directors’ meetings to discuss the financial statements and operating results as a prelude to financial disclosure after the end of the month of September. In the midst of this week"s trading, none of the companies’ shares reported distinguished performance, while the decline in the shares of blue chips had the greatest impact in the closure of Al-Quds Index in the red zone. As for the liquidity indicator, trading value has increased following the execution of several deals in large volumes on the company"s shares of Palestine Mortgage & Housing Corporation prior to the date of holding its Extraordinary General Assembly, which its agenda includes a discussion of transforming the company from public shareholding into private limited company.