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Sahem Weekly Report (10-14)/11/2013
In a record activity, transactions of Palestine Stock Exchange PEX were characterized with momentum this week, resulting into trading value of $75.66 million, following recording the highest daily trading value since the establishment of the stock exchange in the fourth trading session of the week. After successive, multiple and varied drivers anticipations, it may be dragged into minds that this week is a product of the conservatism and holding policy approached by the elements of the Palestinians capital market sector over the years, which stemmed from the principle rooted from the confidence of investment feasibility in the listed Palestinian companies. After the prices’ steadfastness of the PEX before all the bumps, supported by substantial positive data such as the financial performance, the rewarding yield, companies strategic plans and some improvements on the political level, and marketed based on its attractive feasibility far from the random sharp fluctuations; trading of this week – with all its substantial effects – came as an optimistic indicator to a later stage lacked by the stock market for more than 5 years in terms of trading values and volumes .
Within the week’s positive momentum variables, the structural shareholders of the largest investment company in the stock market - Palestine Development and Investment PADICO – had the greatest echo, when Palestine Telecommunications Company PALTEL bought the stake of each of the Palestine Investment Fund and Blakeney group, totaling about 32 million shares through recording deals on PADICO’s share that lifted the trading value for the share alone to $55.42 million in the week. Following those transactions and the continuation of PALTEL’s purchase through the market; PALTEL’s stake in PADICO increased to about 41 million shares, which represents 16% of the capital, to record new major shareholders book for PADICO topped by PALTEL with the lion"s stake, and lay some featuring foundations trends that may be strategic for the two companies. While important categories of traders in the stock market followed the momentum trading trend on the stock, especially with the early disclosure of PALTEL about its intention to carry out the purchase. Non- deals transactions were activated significantly to amount 28.41% of the total number of traded shares on the company PADICO. Also price gains accompanied the fast liquidity on the stock, increasing its market price by 19.42% at the end of the week, to close at the level $1.23 through daily wide price leaps, breaking through solid resistance levels and touching other higher levels. All segments of the company"s shareholders are looking forward to be tested in the next stage , especially after significant changes in their majors, which in turn may be the driving wheel to trading activity on the shares of PADICO after slumber frustration that lasted for many years and resulted in serious low price levels.
Although PADICO was highly seen on screen, but the momentum has also included the shares of Palestine Telecommunication Company PALTEL - the buyer and the largest company by market capitalization and heaviest weighted share in Al-Quds Index - , when recorded transactions worth of $15.86 million, which is more than double the daily traded value since several years. As for price, the shares recorded gains by 5.47%, closing at the level of JD5.40, forming along with PADICO the core leverage for Al-Quds Index to surpass the five hundred points, which had been abandoned since July 2011, to end its hectic dealings and eye catching price moves at the level of 511.49 points with weekly gains of 7.00%. In any case, reasons for active movement on the shares of companies refer to the investment factors, but it is not borne in mind that PALTEL has now become more exposed to PADICO after lifting of the proportion of its ownership, where, correlation may be higher now between the two companies in several themes related to the implications of the financial statements of income and price assessments on one hand and carry the burden of its shares on the stock exchange activity on the other. It is noteworthy that the two companies have commutative ownership, PADICO owns around 31% in PALTEL.
Undoubtedly, hope and optimism dominated in PEX this week, especially after a thirst to stimuli that lasted too long. Where some price movements has been active on some stocks with medium market capitalization in the stock market during the week, some of which may carry part of the exposure to these blue chip stocks with substantial changes, and some of what may be a viable investment alternative when it is difficult to collect another. Of the most important price gains realized this week and asked about the causes by the Palestinian Capital Market; Palestine Industrial Investment Company - the investment arm of PADICO in the industry sector - which its share achieved an increase of 12.36%, and the National Bank - owned by PALTEL by 14% - which made gains by 10.00%.