FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010PALESTINE SECURITIES EXCHANGEAhmad AweidahCEOIn 2009, the PSE recovered from the impactof the global financial crisis with a goodperformance relative to other MENAcountries.Over more than thirteen years, the PSE hasconsistently met challenges of a difficulteconomic and political reality with a high levelof commitment to its goals and to thedevelopment of an enabling investmentenvironment.In 2009, the PSE recovered from the impactof the global financial crisis with a goodperformance relative to other MENA countries:The Al-Quds index increased by 11.62% by theend of the year, ranked the eighth among Arabexchanges in terms of index growth rate. ThePSE is financially sound, and well capitalized tomaintain a steady business in a volatile world.The year 2009 witnessed continuous attentionby the PSE to strengthening its prominentpresence on many levels; The PSE was able toenhance its role locally by reinforcing principlesof transparency, investment culture and goodgovernance. In terms of surveillance, the PSEand Palestine Capital Market Authority (PCMA)signed an agreement with Smarts Group ofAustralia, to utilize Smarts on Line System forinstant supervision over securities trading.The PSE convened the “Third AnnualPalestinian Capital Market Forum” in October2009 discussing the priorities and opportunitiesof emerging markets post the global financialcrisis.Two companies were listed in 2009. Today, thePSE has 39 listed companies across five maineconomic sectors; including banking,insurance, investments, industry and services.30 companies out of 39 achieved profits during2009 with 100% compliance with disclosurerequirements.The year 2009 also witnessed distinctivedevelopments in terms of the InvestorEducation Program; The Stock SimulationProgram was launched targeting universitystudents in Palestine to educate them on howto invest in the securities market.The PSE also strengthened its IT infrastructureby implementing a hot disaster recoverybackup site with high availability for allNetworks, systems and services.Today we see a locally, regionally andinternationally recognized institution thatcompetes with many other stock exchangeswith more conducive working environments.Our common values will always be goodgovernance, transparency, efficiency, fairness &equal opportunities.HISTORY AND DEVELOPMENT• 1996: Established as a private shareholdingcompany to promote investment in Palestine.• February 18, 1997: First trading session.• 2009: a well established exchange with turnoverin 2009 of US$ 500,393,398 and a marketcapitalization of US$ 2.37 billion.• February 2010: became a public shareholdingcompany responding to principles of transparencyand good governance.• Listed Companies: 39 Palestinian companiesas of 31/12/2009 across five main sectors:banking, industry, insurance, investment &services.• Member Brokerage Firms: 10 firms as of31/12/2009 with offices and branches in most ofthe Palestinian cities.• 2005: the Al-Quds Index had increased by306% compared to 2004, recording the highestamongst the world Stock Exchanges.• 2006: Launched the Investor EducationProgram.• E-trading: Launched in April 2007.• In 2009: the PSE was ranked 33rd amongstInternational Stock Exchanges and regionallycomes 2nd in terms of investor protection.• Only equities are currently traded on the PSE.2009 ACCOMPLISHMENTS• Convened the Third Annual Palestinian CapitalMarket Forum in November 2009. The Forumdiscussed priorities and opportunities of emergingmarkets post the global financial crisis. The Forumwas attended by local, regional & internationalbusinessmen, investors and experts, in addition tothe Chairman of IOSCO Emerging MarketsCommittee, and a Chilean-Palestinianbusinessmen delegation.• Organized promotional Road Show to Santiago,Chile in May 2009 to attract new investments tothe PSE.• Listing of two new Companies: GlobalcomTelecommunications Company in October 2009 &The Palestine Islamic Bank in July 2009. The PSEnow has 39 listed companies on the exchangeworking in 5 main sectors; banking, investment,services, industry & insurance.• PSE and Capital Market Authority (CMA) signedan agreement with Smarts Group of Australia, toutilize Smarts on Line System for instantsupervision over securities trading.• Implemented a Hot Backup site and highavailability for all Networks and systems andservices, in addition to new infrastructure forTechnologies and Telecommunications, newSecurity systems, new trading surveillance systemusing SMARTS system, the Stock Simulationsystem.• Developed new portal and a new DataDissemination System.• Run two rounds of Stock Simulation competitionin five national universities in Palestine with theparticipation of 180 students.• Published five new issues of Souk Al-MalMagazine (a specialized magazine in capitalmarkets).• Held the Accredited Broker Course in December2009 with the participation of 19 employees ofmember brokerage firms at the PSE.• Announced the approval on the Arab InvestmentGroup Membership. the PSE has now 10 memberbrokerage firms.• Issued the investor number (IN) for shareholdersat the PSE.• Attained a membership of the Association ofNational Numbering Agenda (ANNA) that qualifiedthe PSE to issue the ISIN (International SecuritiesIdentification Number).• Issued & distributed multiple studies,newsletters and statistical reports.FUTURE OUTLOOK• Develop domestic institutional investors andattract Palestinian Diaspora and foreign capitalthrough local, regional & international road showsto attract new investments to the exchange;• Reaching an agreed division of labor onregulatory matters between PSE and CapitalMarket Authority;• Expand on investor education programs mainlyfor students at all academic levels.• Target public shareholding companies to belisted on the PSE.• Target private shareholding companies to gopublic and be listed on the PSE.• Perform all preparations that are needed interms of managerial and technical requirementsfor a projected independent Central SecurityDepository (CSD);• The PSE will additionally dedicate more effort tothe improvement of the legal environment,disclosure, transparency, enhancement of listingrules, and keeping up with the latestdevelopments together with investmentawareness, communication and state of the artICT environment.PAGE 136
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010PALESTINE SECURITIES EXCHANGEOFFICIAL 6 MONTH STATISTICSUS$ millions# Shares millionsTotal Volume Average Daily Volume Total Volume Average Daily VolumeStocksJul-09 19.94 0.95 11.92 0.57Aug-09 27.94 1.27 12.00 0.55Sep-09 32.68 1.82 26.90 1.49Oct-09 29.98 1.43 14.85 0.71Nov-09 21.07 1.17 8.68 0.48Dec-09 34.22 1.63 18.66 0.89TOTAL 165.83 1.38 93.00 0.78BondsJul-09 0.00 0.00 0.00 0.00Aug-09 0.00 0.00 0.00 0.00Sep-09 0.00 0.00 0.00 0.00Oct-09 0.00 0.00 0.00 0.00Nov-09 0.00 0.00 0.00 0.00Dec-09 0.00 0.00 0.00 0.00TOTAL 0.00 0.00 0.00 0.00OtherJul-09 0.00 0.00 0.00 0.00Aug-09 0.00 0.00 0.00 0.00Sep-09 0.00 0.00 0.00 0.00Oct-09 0.00 0.00 0.00 0.00Nov-09 0.00 0.00 0.00 0.00Dec-09 0.00 0.00 0.00 0.00TOTAL 0.00 0.00 0.00 0.00MarketCapitalizationUS$ millionsIndexMONTHLY STOCK VOLUME VS INDEX(US$ millions)StocksIndexMONTHLY MARKET CAPITALIZATION(US$ millions)Jul-09 2,286.88 488.77Aug-09 2,333.74 498.45Sep-09 2,363.95 498.92Oct-09 2,391.19 500.18Nov-09 2,397.05 502.12Dec-09 2,375.37 493.00CONTACT INFORMATION35302520151050600 2,5005002,0004001,5003001,00020010050000Jul Aug Sep Oct Nov Dec Jul Aug Sep Oct Nov DecContact Name Mr. Ahmad Aweidah E-mail ahmad.aweidah@p-s-e.com Website www.p-s-e.comPAGE 137
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