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Dividends distribution proposals and features for new deals in the PEX

2016-03-10

Sahem Weekly Trading Report (06-10)-03-2016

Within the period that follows the annual financial data disclosures of the listed companies, the dividends distribution announcements pace for the year 2015 accelerate. On the other hand and despite the slow and conservative transactions, Al-Quds Index witnesses coherent and positive price performance in parallel to the continuous lack of liquidity momentum. The liquidity and its indicators’ levels are still scarce if the institutional transactions are excluded, which in turn impose a difficulty in predicting the momentum trend due to the lack of liquidity that supports purchasing or compress selling. Within the dividends distribution strategy, 14 companies raised their recommendations till this moment regarding distributing dividends, whereby, 10 companies recommended distributing cash dividends, 2 companies proposed distributing stocks dividends , while, the remaining 2 companies recommended distributing both cash dividends and stocks dividends.

This week the blue-chips’ dividends announcements completed. Whereby, with the proposal of Bank of Palestine BOP, the heavy weighted stocks in Al-Quds Index and highest circulations in the market contributed in drawing the investment policy for their shareholders prior to holding the general assembly GA meetings. During the week, the board of directors of BOP proposed distributing 10.29 cash dividends and 5.71% stocks dividends ($28 million) to the GA that will be holding a meeting on 25/03/2016. The GA will also discuss purchasing an additional share of 31% of the Arab Islamic Bank AIB, where BOP's stake will reach 52% accordingly. In addition, it will also discuss merging with Palestine Commercial Bank PCB through allocating every three stocks of PCB equivalent to one stock of BOP. According to the bank’s release, formal approvals were taken by Palestine Monetary Authority PMA. On the other hand, AIB will remain an independent entity, whereby, its BOD recommended distributing 7% stocks dividends, to raise its paid-up capital to $53.50 million.

In the market, the stock of Palestine Telecommunications PALTEL- the largest company by market Capitalization- topped the PEX by 87.21%. This followed a speculative activity on the company’s stock coinciding with the approaching holding of the GA meeting at the end of March to approve distributing 45% cash dividends. Whereby, the investment trends of traders vary in this period between reporting rapid gains before and after the dividends’ entitlement, and between achieving yield along the years. On the other hand, an institutional transaction in the last trading session of the week, has raised the trading value significantly. Regarding the activity, the stock of Palestine Development and Investment Company PADICO secondly topped the PEX by 3.28%. PADICO’s performance was slow, while, executing institutional transactions raised the trading value. BOP’s stock followed with transactions that constituted 2.50%, to reflect the traders’ trend variation on BOP’s stock prior to holding the GA meeting.