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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT APRIL 2007
PALESTINE SECURITIES EXCHANGE
Dr. Hasan Abu-Libdeh
Chairman
The year 2006 witnessed serious
transformations in the life of the PSE
on both the organizational and practical
levels.
The year 2006 was not a normal year for the
Palestine Securities Exchange nor was it so
for investors. Since late 2004, the PSE has
entered an ascending correction movement
compensating Al-Quds Index loss for four
years of hurdles that prevented achieving the
expected growth that reflects an objective
assessment of the performance of the
Palestinian economy and public
shareholding companies. The aggregate
consequences of the continuous Israeli
aggression during the first years of the
Uprising had a direct role in stopping the
growth of the index. During the year 2005,
the Palestinian cause witnessed political
progress that led to unprecedented upward
movement of the index. The result was that
the index registered the highest growth level
in the world that reached 306%. However,
the developments following the legislative
elections that took place at the first month of
2006, and the security tensions in Palestine
before and after the said elections, made the
index lose an important portion of its gains of
2005. Despite this decline, I can assure that
PSE is stable and stands on solid ground.
Meantime, the PSE enjoys a benefit that
qualifies it to become the favorite market for
investment as soon as circumstances
improve. It is sufficient to mention that the
performance of Al-Quds Index was not the
worst in 2006 that was characterized with a
deep correction movement that
overwhelmed most of the stock exchanges in
the region despite its developing economies
and high oil prices.
The year 2006 witnessed serious
transformations in the life of the PSE on both
the organizational and practical levels. Since
May 2006, the PSE launched the procession
of increasing the bases of ownership,
transparency and good corporate
governance. The General Assembly of the
PSE decided to go public and become a
public shareholding company. More than
51% of its current shares will be sold for the
public and other investors including
Palestinian brokerage firms. The PSE
commenced in preparing a strategic plan,
restructuring, staff development, increasing
interaction with public shareholding
companies and member companies
(brokerage firms), sustained coordination
with the Capital Market Authority, and
allocation of resources to increase public
awareness of investors. In this respect, the
Investment Awareness Project was launched
during the second half of 2006. A radical
change was carried out in the computerized
environment in order to maintain the efficacy
of the PSE operations and to protect
investors. The PSE regulations were also
developed to keep up with the Securities
Law and the Capital Market Law.
HISTORY AND DEVELOPMENT
In 1995, and in aproactive outlook for
investment prospects in Palestine, as well as
the urgent need for creating asound
investment enviroment, Palestine
Development and Investment Company
(PADICO), and in cooderation and
cooperation with the Palestinian National
Authority, took the first steps towards
establishing asecurities exchange in
Palestine. This initivate aimed to attract
Palestinian savings inside Palestine and in
the Diaspora and encourage foreign
investments that would provide long-term
financing for economic projects in Palestine
that ensures the advancement of the
national economy under all circumstances. It
also aimed to regulate and faciliate trading
in securities in asecure investment
enviroment. Hence, PADICO signed an
agreement with the Ministry of Finance for
operating the Securities Exchange in the last
quarter of 1996, and the first trading session
was held on 18 February 1997.
The beginings of PSE were modest but
developing, in terms of the number of listed
companies and brokerage firms, as well the
size of transactions. Starting with few
companies in 1997, the number of listed
companies on PSE increased to thirty-three
by end of 2006, while the number of
brokerage firms increased to sevenm with
offices and branches in most of the
Palestinian Cities. Most listed companies
trade in Jordanian Dinar, while others trade
in US Dollars. Only equities are currently
traded on PSE, but there is potential and
readiness to trade other securities in the
future.
With the continuous expansion and
progress, Palestine Securities Exchange
(PSE) has opened a branch office in
Ramallah in order to serve investors and
ccordinate with stakeholders. With an
Outlook for enhancing the principels of
partnership and transparency, PSE is in the
process of becoming a public shareholding
company, and hence would be listed.
FUTURE OUTLOOK
In the year 2007, the PSE will witness more
procedures for good corporate governance
including offering its stocks for subscription
and listing its shares at the Exchange. In
addition, it will provide investors with the
opportunity of direct trading via the internet
(E-Trading). Training courses will be held to
raise the efficiency of its workers and
Traders. It will finance several initiatives that
aim at supplying technical and basic
analysis of listed companies. It will attempt
to develop the performance of brokerage
firms, enhance the procedures of disclosure,
and sign bilateral agreements with regional
and international stock exchanges. With
God's will, not less than ten new companies
will be listed so that the number of
companies listed at the exchange will reach
45 public shareholding companies by the
end of the year 2007. We will also launch a
group of Electronic surveillance programs
for daily trading to protect investors. The
year 2007 shall witness, by God's will, more
efforts in the field of investment awareness,
horizontal expansion by opening a branch of
the PSE in Gaza Strip, and expansion in the
Social Liability Program so as to reflect more
commitment in the human and social
program. In cooperation and coordination
with the Capital Market Authority, we hope to
achieve the legal and organizational
requirements to launch the market making
service so as to protect the investors from
the severe fluctuations in stock prices at any
trading session.
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