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Price correction and rebound in the stock market with variation in traders classes

2014-02-06

Sahem Weekly Trading Report [02-06/02] 2014

Palestine Stock Exchange PEX started the week by breaking through the 600 points level in the first trading session of the week, amid the domination of the investors’ optimism factor over any other factor related to the market. The PEX entered a correction starting the second trading session of the week, in trials for Al-Quds Index to stabilize above the physiological barrier that was dominated by the speculators’ profit taking transactions and selling pressure on the leading shares in reflection of the routinely investors’ decision basis variations in the PEX. Within active circulation and shifts among investment positions , Al-Quds Index rebounded upwards by 1.19% from its low touched level during the correction, amid market price purchasing transactions and other bids strengthening the support levels on the leading shares. Following the correction and rebound, new important elements entrenched in the PEX that are needed by all elements of the capital market and compatibility of investors. 

During the week, the daily average trading value reached $4.17 as a result of a continuous trading momentum on the leading shares of both Palestine Telecommunications PALTEL and Palestine Development & Investment Company PADICO, in which, both contribute in 70.89% of the PEX’s total trading value. The trading value was also increased due to executing several high-volume institutional transactions on the shares of Palestine Islamic Bank ISBK. In the market, the share of Palestine Development & Investment Company PADICO- the largest investment company by market capitalization- topped the PEX in terms of trading volume; constituting around 51.66% of the PEX’s total trading volume and trading value as well; constituting around 46.21% of the PEX’s total trading value. Amid the correction, several investors were willing to seize the wide price range of PADICO when recorded a percentage of 11.58%; to accelerate the price movements on the share leading to reduce the profit-taking wave that compelled the share to record losses that exceeded the 9% during trading. This guided PADICO to rebound closing at the level of $1.79; slightly down by 0.56%. The performance of the largest company in the PEX by market capitalization- Palestine Telecommunications PALTEL- was not different from the performance of PADICO when recorded a wide price range of 4.69% that resulted from the domination of purchasing bids on its lowest level, to rebound closing on the level of JD6.45; down by 3.44% than its previous week’s closing through transactions that constituted around 24.68% of the PEX’s total trading value. It is worth mentioning that the BOD of PALTEL will be holding a meeting on 12/02/2014, whereby, will approve the preliminary financial statements for 2013.

Regarding the PEX’s incentives and the acceleration of the listed companies’ disclosures, the National Insurance Company NIC disclosed recording net income of $5.59 million for the year 2013; up by 17.46% than the year 2012. This was supported by a growth in the investment profits and other revenues, which compensated the decline in net insurance profits after investment income and general & administrative expenses. On the other hand, Wataniya Palestine Mobile Telecommunications WTANIYA announced decreasing its net loss for the year 2013 by 10.50% compared to the year 2012 to reach $21.32 million due to an increase in the company’s revenues by 6.06% due to an increase in the company’s subscribers by 4.59% that resulted in enhancing the operating income. In parallel to the disclosures, the chairman of The Vegetable Oil Industries Company VOIC proposed to the GA that will be holding a meeting in the second half of April distributing 50% cash dividends for the year 2013, to record a return of 7.14% according to the last market price recorded.