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Al-Quds Index in a relative isolation from the Palestinian street’s unrest

2015-10-08

Weekly Trading Report [04-08/10/ [2015

With the different names of the current situation in the Palestinian street, all the community parties are cautiously anticipating what might be construed to the unrest in the Palestinian Territories in the coming period. There is no doubt of the expected and spontaneous negative impact on the economy access gate- the stock market- due to any political instability in the region. However, Al-Quds Index in Palestine Stock Exchange PEX hedges itself- even if relatively- against any political or security evolution. The missing element that is aimed by all the financial securities’ sector parties in the stock market, which is liquidity, could be the main factor for the non-sharp price drops in the affecting stocks in the Index. It is worth mentioning that over the past few years, the observer touches a significant rising in the investment awareness for all segments in the traders’ behaviour. Whereby, the long-term investor now doesn’t get rid of his investments in time of political instability due to his investment goals’ nature, expected return and the length of the investment horizon. It is also noticed that there is weakness in the speculative category in the PEX, which usually contribute in formulating price trends, following the decrease in the liquidity momentum. Therefore, the current lack of liquidity and circulation in the PEX are what support the lack of negative price effects.

During the week and the start of the heating up in the Palestinian street, Al-Quds Index declined below the 480 points level in the first trading sessions of the week, to close the week at the level of 481.49 points; reducing the loss to 0.41%. This controlled decrease came within very weak transactions that didn’t exceed $1.82 million. Regarding the most active stocks, the stock of Bank of Palestine BOP- the largest bank by market capitalization- topped the PEX when its transactions contributed in 27% from total trading value during the week, to close at the level of $2.50; slightly down by 0.40%. The stock of Palestine Telecommunications PALTEL- the largest by market capitalization- followed when its transactions constituted 26% from the PEX’s trading value, to close at the level of JD5.40; down by 0.37%. However, a more significant decline was noticed on the leading stock of Palestine Development and Investment Company PADICO- the largest investment company by market capitalization when closed at the level of $1.09; down by 0.91% within scarce transactions that didn’t exceed $65 thousands.

Regarding the substantial news of the listed companies, whereby, some accelerated about the leading telecommunications companies. In this context, the CEO of Palestine Telecommunications Company PALTEL expected getting the 3G frequencies before the end of the current year, and to start operating in the middle of the next year. He also noted that there is no monopolistic exclusivity for the 3G frequencies if obtained, whereby, the two Palestinian operating telecommunications companies are completely licensed for this service. Following this, the Council of Ministries approved a temporary exemption of the annual license fees (7%) of Wataniya Palestine Mobile Telecommunications Company WATANIYA - for a period of 5 years- from the annual gross revenues as long as the company invests the exemption value in building modern and advanced network to provide 3G and 4G frequencies once the required frequencies are allocated.