Al-Quds Index noticeably declined at the end of the week by 3.52%, to trade at its lowest level since the 21st of January 2014. This drop came amid the routine decreases in the listed companies’ shares prices due to the cash dividends distributions for the year 2013, and what followed of attempts to change investment positions for the purpose of cash dividends entitlements and maximizing the return on investment. Whereby, shares of companies that approve distributing dividends witness spontaneous drop in their prices in the days that follow the dividends entitlement day; with a percentage close to the calculated dividends yield prior to the distribution. This is explained by noting that the share’s price holding cash dividends before the general assembly meeting is not equivalent to the share’s price after the dividends entitlement. In this context, the variation scope concerning the traders’ interests is enhanced; the buyer of the stock in this drop trend – discounted by dividends value- may be motivated by the historical technical performance of the share in pre and post the dividends entitlement announcement or by the expected company’s profits growth or else by the share’s attractive market indicators related to the new recorded low price. While the seller of a stock with discounted price by the dividends value may be motivated by liquidating his holdings in order to capture another stock that holds dividends in a near period or the trader himself has just achieved a targeted total shareholder’s return (dividends and capital gain). At the end of the week, Al-Quds Index closed at the level of 558.13 points; down by7.45% than its highest closing in the year 2014, and by 4.07% than its simple average of this year, and up by 2.71% than its lowest level in the year 2014.
In terms of cash dividends entitlements and their effects, the general assembly of Palestine Telecommunications PALTEL- the largest company by market capitalization and the most affective share in Al-Quds Index- approved in its meeting on 26/03/2014, distributing 50% cash dividends, divided into 40% cash dividends from the company’s net income and 10% exceptional cash dividends for the company’s investments during the year 2013. According to the adopted percentage, dividends yield recorded 7.94% according to the market price prior to the GA meeting. On the other hand, PALTEL’s price declined after the entitlement date by 7.46%- the highest fluctuated rate for the share during the trading session, to contribute in significant price levels anticipation in the beginning of the coming week. During the week, PALTEL closed at the level of JD5.83; down by 7.02% than its previous closing through transactions worth $3.19 million; constituting in 50% of PEX’s total trading value. On the other hand and during the GA meeting, the Chairman of the Board of directors, Sabih Al-Masri, indicated the steady and continuous growth in the financial performance of the Paltel Group, in which is a result of the studied plans pursued by the Group"s management in its operations that were flexible in terms of dealing with the economic, political and investment changes, with a commitment to respond to the needs and aspirations of the market on one hand, and the interests of the shareholders of the company and maintaining their return on investment on the other.
Regarding this week’s trading and in terms of the leading shares, Palestine Development and Investment Company PADICO- the largest investment company by market capitalization- came in the second place in terms of trading value; contributing around 22.3% of the PEX’s trading value. PADICO declined by 1.69%, to close at the level of $1.75 due to exit of small speculators amid variance in the investment decision basis for cash dividends entitlements during May 2014. Moreover, the share of Bank of Palestine BOP- the largest bank by market capitalization-declined by 0.93%, when closed at the level of $3.20 after transactions worth $0.74 million. Far from trading, holding the board of directors’ meetings announcements accelerated in order to approve the dividends distribution strategies for the year 2013. By the end of this week, three companies approved distributing cash dividends for the year 2013, while 15 companies approved dividends distribution with appointing the GA meetings. On the other hand, discussing the financial statements for Q1 2014 will be the main subject for the BOD meetings during the legal period of 15 days that is granted by the PEX and starts in April 2014.