FEDERATION OF EURO-ASIAN STOCK EXCHANGES
SEMI ANNUAL REPORT OCTOBER 2006
PALESTINE SECURITIES EXCHANGE
The Palestine Securities Exchange (PSE)
was the best performing stock exchange in
the world as the Al Quds Index increased
by 306.61% for the year of 2005.
Dr. Hasan Abu-Libdeh
Chairman
The Palestine Securities Exchange (PSE) was
the best performing stock exchange in the
world as the Al Quds Index increased by
306.61% for the year of 2005. Moreover,
trading values surged in 2005 to reach
US$ 2.096 billion, which is more-than-double
of all values for all years since the first
trading session in 1997 and until 2004.
The market capitalization surged to almost
US$ 4.5 billion, that is as big or bigger than
HISTORY AND DEVELOPMENT
As early as 1995, a number of pioneers in
the Palestinian private sector realized the
importance of creating a well-regulated, up-
to-date market for securities in the country.
The aim was to tap and channel domestic
and foreign capital into the business
community through long-term financing of
commercial and infrastructure projects.
Their ideas materialized into an agreement
signed with the Palestinian National
Authority (PNA) on November 7, 1996 to
operate the PSE as a private shareholding
company. On February 18, 1997, PSE
conducted its first trading session as the
first fully automated and electronic Arab
stock exchange.
From only a few companies listed in early
1997, the number of listed companies rose
to 28 in 2005 and is expected to grow
further in the near future after the
promulgation of a number of laws and the
formation of the Capital Market Authority. In
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stock markets in seven of the 10 new
European Union members. Three companies
were listed on the PSE during the year, which
brought the number of listed companies to
28. In January 2005, the PSE welcomed the
listing of a new pharmaceutical company,
Berzeit Pharmaceutical Co. (BPC). Golden
Wheat Mills (GMC) began trading in June
2005. Meanwhile, Bank of Palestine (BOP)
joined the banking sector in November 2005.
2005, The PSE was the best performing
stock exchange in the world as the Al Quds
Index increased by 306.61% for the year
of 2005.
Although the existing setup is capable of
trading several financial instruments, only
common stocks are currently traded at PSE,
with ongoing plans to trade other securities
in the future. Shares of the listed companies
are mostly traded in Jordanian Dinars, while
some are traded in US Dollars.
FUTURE OUTLOOK
The excellent performance of the PSE in the
first half of 2005 was compelling. Taking into
account corporate growth expectations over
the coming years, the PSE continues to
exhibit strong upside potential. The PSE will
aim to benefit from the regional changes
including: record high oil price levels,
repatriation of capital, low interest rate and
inflation environment. The PSE believes that
the introduction of capital market laws would
boost investors’ confidence through
increased transparency and regulation.
All these have provided ground for
confidence, and contributed significantly
on the future outlook of the second half
of 2005. The PSE looks forward to
accomplishing the following objectives:
• recruiting new shareholding companies
to be listed.
• creating exposure and awareness about
the PSE and investing in securities.
• establishing a “channel of
communications” between the PSE and
related institutions both locally and abroad.
• holding more specialized training courses
in corporate finance.
• encouraging sound corporate
governance.
• promoting the brokerage firms to expand
businesses geographically to cover all
potential investment centers.