RAMALLAH, Wednesday, January 11, 2023 (WAFA) – Data from the Palestine stock market, the Palestine Exchange (PEX), revealed an improvement in all its indices last year, as the main Al-Quds index closed the year's transactions up by 5.1%, making it the sixth best index in the Arab stock markets, while trading values increased by about 13%.
PEX Chairman of the Board of Directors, Samir Hulaila, described these indicators as "very good," in light of the difficult conditions of the global economy, in addition to the great difficulties faced by the local economy.
Hulaila told a press conference in Ramallah held to review last year’s performance of the Palestine stock market that these results "came while the global economy is facing difficult challenges, which have left a significant negative impact on the Palestinian economy, which is already facing exceptional challenges."
The most prominent of these difficulties, Hulaila said, was the rise in interest rates, "which is the biggest challenge we face," as it encourages deposits with banks at the expense of investment, including in stocks.
Likewise, Hulaila said that the Palestine Exchange is facing a difficult political situation, "as we are going through the most difficult times, especially after the new government in Israel assumed its duties, which began its work by dealing a new blow to the Palestinian government's budget," referring to the recent Israeli government's decision to confiscate $40 million of the clearance tax revenues.
As for the third challenge, according to Hulaila, it is represented by high inflation, which despite expectations that it will start to decline by the end of this year, remains high with the rise in energy and commodity prices.
"The stock exchange is in the midst of all these challenges, however, the results of the year 2022 were very good, which are the best in 10 years, whether in terms of trading volume, profits of listed companies, or distributions from these profits, which are all indicators of the health of the stock market and its ability to make a difference in 2023,” he said.
According to Nihad Kamal, PEX Director General, the Al-Quds index recorded an increase by the end of last year by 5.1%, compared to the close of 2021 trading, putting it in the sixth place among the Arab stock market indices in terms of performance, after Egypt, Abu Dhabi, Muscat, Jordan and Bahrain, and ahead of the stock indices of Dubai, Kuwait, Saudi Arabia and Qatar, at a time when the global financial markets suffered significant losses, as the rate of decline in the Wall Street indices reached about 19%.
As for the value of trading during the past year, it jumped by 12.9%, rising to $473 million, from $419 million in 2021. The Palestine Exchange ranked fourth among Arab stock exchanges in terms of growth in this index after Qatar, Dubai and Abu Dhabi.
The investment sector ranked first in terms of the value of trading, accounting for about $225 million with an annual growth of 79%, followed by the banking sector with about $142 million with a growth rate of 5.5%, then the services sector with about $70 million with a decrease of 25.1%, the industry with about $29 million with a decrease of 16.4%, and finally the insurance sector with about $6 million with a decrease of 78.6%.
The market value of companies listed on the Palestine Exchange by the end of last year was about $4.9 billion, up from about $4.4 billion at the end of 2021, an increase of about $500 million or by more than 11%, to rank fourth in the growth of this index among Arab stock exchanges after Abu Dhabi, Dubai and Jordan.
Market capitalization was divided into services by 31%, banks and financial services by 27%, investment by 26%, industry by 11%, and insurance by 5%.
Kamal said that the profits of listed companies, until the third quarter of 2022, amounted to $304 million, an increase of 8%, and is heading at the end of the year to exceed the profits in 2021, which amounted to about $374 million.
The banking sector was the most profitable with about $105 million until the end of the third quarter, an increase of 17.2% over the corresponding period of 2021, followed by the services sector with about $99 million, an increase of 8%, then the investment sector with $55 million, a decrease of 5.5%, the industrial sector with $32 million, a decrease of 6.8%, and finally the insurance sector with about $12 million, an increase of 79.5%.
Total dividends to shareholders last year amounted to $221 million, compared to $134 million in 2021, a year-on-year increase of about 65%.
Hulaila said that PEX seeks to achieve a number of objectives during the current year, most notably attracting young people and Arab investors, attracting more new listings, and launching new investment tools.
"There are licenses for many new companies, in different sectors, and there are also existing public shareholding companies. We are in contact with them and expect to list five companies this year,” he said.
PEX, along with other partners, is also working on launching a medium-term equity investment fund that will be listed on the stock exchange, followed by a startup fund.
"We held several meetings with the Capital Market Authority to lay the foundations for the launch of an investment fund in the stock market, provided that the startup support fund will come at a later stage, and both aim to attract small investors, especially young people,” said Hulaila.
M.K.
