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December gains shrink more than half of the loss for the year 2014

2014-12-31

Sahem Weekly Trading Report (28-31)-12-2014

Palestine Stock Exchange PEX ended the year with optimism towards the New Year, leading Al-Quds Index to close above the 500 points level which has been abounded since the beginning of November 2014.  As usual, the Palestinian investment environment ends the year with its distinct entity that holds the investors’ confidence and the exceptional investment opportunities coinciding with the steady growth of profits and maintaining a stable performance. Despite the sharp price fluctuations in the regional markets in which their weekly or sometimes daily ranges exceed the annual change in the PEX, but the PEX immunized itself from these fluctuations especially the negative ones through the progress in the investors’ awareness on one hand and the investment decision basis solidness on another hand and what is included of increased earnings and the regulatory legislation transparency. The eyes move towards 2015 and what may be added to the PEX to improve the market in general and increase the market capitalization.

In terms of prices, Al-Quds Index recorded an annual decrease of 5.50%, while its loss during the year reached 10.92%. The price rebounding during December, in which Al-Quds Index achieved 6.08% gains through, reduced the year’s declines; leading Al-Quds Index to close above the 500 points level, to pave the way to enter 2015 with new price levels. Regarding these movements, the drops in the blue-chips prices played a major role in decreasing Al-Quds Index. The decreasing rates and their weights varied following the market capitalization of these companies. During the year and according to the leading shares, the decline in the stock prices of both Bank of Palestine BOP by 13.31% and Wataniya Palestine Mobile Telecommunications WATANIYA by 18.27% mainly contributed in the decline of Al-Quds Index, followed by a price decrease in Palestine Telecommunications Company PALTEL by 1.21% while Palestine Development and Investment Company PADICO has succeeded to gain slightly.

Within its yearly modification that coincides with the end of the year 2014, the PEX announced the new composition of the Al-Quds Index for the year 2015 after reviewing the companies it consists of, to include 15 companies out of 48 listed companies that represent 82% of the total PEX market capitalization. It is worth mentioning that the methodology used for Al-Quds Index calculation is the same as the methodology used at the end of the year 2014, whereby, the number of companies didn’t change. However, the 2015 Al-Quds Index was modified by replacing Palestine Industrial Investment Company PIIC with the Arab Palestinian Investment APIC in the investment sector. On the other hand and within the efforts of the Palestinian capital market parties to activate the trading in the PEX, a group of businessmen, academics and advisers discussed the possibility of developing new investment tools that adapt with the economic situation in Palestine. These tools include real estate investment funds and equity funds which may be more suitable to the reality of the Palestinian Capital.