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Sahem Weekly Trading Report [29/12/2013 – 02/01/2014[
Palestine Exchange PEX ended the transactions of the year 2013 with immunity that send more confidence among investors, and carry hopes to return the improvement to activity’ indicators in the stock market in terms of liquidity and price movements in the year 2014 . However, there is no doubt that the eyes are moving for the next year with caution and hope at the same time, following the private entity of the Palestinian investment environment that is linked to local political issues, taking into account the ability of the PEX to isolate itself from regional variables as it has already done. Over the year 2013, Al Quds Index split returns between the halves of the year within losses and gains. The Index had dropped at the end of the first half by 5.2 % compared to the previous annual closing for 2012, due to scarcity of liquidity drivers of substantial news on political and economic aspects in general, which has had a clear impact on the investors’ decisions and the preponderance of speculative small investors in the stock market. Al-Quds Index began a gradual growth in the second half of the year 2013, where the third quarter erased losses of the first and second quarters, but without an increase, compared with the annual closing in 2012. Then the fourth quarter of the year 2013 came fraught with relatively momentous trades, wiping out the losses of the first half and registered gains compared to its end of 19.7% and compared to the previous annual closing of 13.4%. And also within a dynamics of the index during the year 2013; Al Quds index closed on a premium to low 20.1 % and a discount to high of only 0.8%.
Al-Quds Index managed to grow during the second half of the year 2013 in parallel with several issues directly related to investment decisions on the one hand and to the elements of this environment that lays the foundation for those decisions on the other. In the second half, the image for data of listed companies was clearer, and the expectations about what would come out at the end of the financial year become more accurate. In aggregate, the financial performance was solid with accelerating growth rates that is linked to an expected feasible yield to shareholders, not to mention the shares that are trading at low and attractive profitability multiples based on the relative stability of the price in parallel to the growth of operational and profitability indicators in the financial statements have. Therefore for everyone to conclude that there are promising opportunities and compelling investment in the PEX, and the corrective price reflection remains the missing issue to commensurate with the fair values of the shares of the companies. It should be mentioned that the average dividends yield in the PEX recorded a value of 6.4% in 2012, while the score moving average of the previous three years amounted to 6.9% and for the four previous years amounted to 6.6% and the five years of 6.6%. The stock market also marked a shift in the level of liquidity in the third quarter following the momentum of transactions that accompanied the announcement of the Palestinian Telecommunications Company to acquire a strategic stake in the Palestine Development and Investment, whereby PALTEL acquired 16.3 % of the shares of PADICO. The nature of the transactions that accompanied the deals were promising, where domestic and foreign institutional transactions revived and yielded active trades that were the product of the policy of “reservation and holding” that trended by all the elements of the Palestinian capital market sector over the years, which stemmed from the principle of confidence about feasibility of investment in listed Palestinian companies, and nodded with an optimistic stage of the stock market that was abandoned since more than 5 years in terms of values and volumes. On the other hand, and in the context of PALTEL’s ownership in PADICO which became a mutual one between the two companies, and put in front of the shareholders some of the foundations for features of trends that may be a strategy for them within the larger exposure on each other, making the shareholders of both companies and observers of the PEX on a higher frequency of anticipation for these two companies.
At the end of the year 2013, the market capitalization of listed companies on the Palestine Stock Exchange increased to $3.2 billion, registering gains of $388.3 million; an increase of 13.6% from year-end 2012. This growth came after notable gains for shares of the three leading companies - Palestinian Telecommunications, PADICO Holding and Bank of Palestine -, which in turn recorded overall gains accounted for 80.5% of the market gains achieved during the year. Where the shares the market cap of PALTEL topped the gains; recording an increase of $120.7 million, followed by "PADICO" to achieve a gain in market cap of $112.5 million, then came Bank of Palestine with gains worth of $79.3 million