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Weekly Trading Report [20-24/04[2014
With the continuous trading weakness and slow movements, Al-Quds Index declined, during the week, in a slower pace than what the PEX has witnessed since the beginning of April 2014. Amid the political variables in Palestine- both the positive and negative- and coinciding with increasing the financial results disclosures and dividends distribution announcements, a stalemate status that is guarded with cautious imposes itself on each investment element in the PEX. The Palestinian reconciliation may lead to a glimmer of hope as it represents one of the independent Palestinian State components, but the optimism or its incentives will not be completed unless reaching a strong economic position that is based on comprehensive political solution. Amid the tide state of negotiation between the Palestinian and Israeli parties, and the ambiguity surrounding the new Palestinian economic policies, especially the tax policies, the negative effects clearly reflect the PEX through a lack of liquidity and price declines as being the widest and most exposed economic gateway.
With the increase of financial and operation results disclosures pace for Q1 2014, Palestine Electric Company PEC disclosed recording net income of $3.18 million in the first three months of 2014; down by 4.08% than the same period of 2013 as a result of a slight decrease in gross revenues in parallel to an increase in operating expenses, leading PEC to record a growth in book value BV to $1.37 as for Q1 2014. It is worth mentioning that the general assembly GA of the company will be holding a meeting on 29/04/2014 to discuss the board of directors BOD’s proposal to distribute 5% cash dividends and 10% stock dividends for the year 2013. According to the dividends proposal, PEC recorded payout ratio of 62.5% based of the EPS recorded in 2013, while, the paid up capital will increase to $66 million (66 million shares) after distributing the recommended stock dividends. Regarding the other disclosures and high market capitalization listed companies, Wataniya Palestine Mobile Telecommunications WATANIYA announced realizing net loss of $4.37 million in Q1 2014; down than the net loss recorded in the corresponding period by 30.52%. Net loss reduction came after a decline in several expenses figures, such as the general, administrative and marketing expenses in addition to depreciation and amortization expenses. Moreover, operating revenues witnessed an increase of 4.46% in the two periods due to an increase in WATANIYA subscribers to 650 thousand subscribers, but the increase of cost of services led gross profits to slightly decrease by 1.51%. On the other hand, WATANIYA recorded BV of $0.34 as for Q1 2014 and P/BV of 2.71x.
With the mixture of the financial statements disclosure period with holding the GA meetings, a momentum of companies’ announcements appears. In this context, the GA of Trust International Insurance Company TRSUT approved, on its meeting on 20/04/2014, distributing 10% cash dividends, to record dividends yield of 4% and payout ratio of 34.48% from 2013’s EPS. Moreover, the GA of Palestine Mortgage & Housing Corporation PMHC approved, in its meeting on 23/04/2014, distributing 4.5% cash dividends, to record 5.42% dividends yield. Regarding the GA meetings of other companies that will take place in the coming days, the GA of Bank of Palestine BOP- the largest bank by market capitalization- will discuss, in its meeting on 25/04/2014, distributing 8.33% cash dividends to record payout ratio of 30.85% according to the EPS of 2013. In addition BOP will be discussing distributing 6.67% stock dividends to raise the paid up capital to $160 million. Moreover, the GA of Birzeit Pharmaceuticals Company BPC will be holding a meeting on 28/04/2014 to discuss distributing 15% cash dividends, to record payout ratio of 50% according to the EPS recorded in 2013. Furthermore, the GA of The Arab Palestinian Investment Company APIC will discuss, on its meeting on 29/04/2014, raising the paid up capital to $60 million through distributing 19.98% stock dividends, to record BV of $1.40 as of 2013 and before Q1 2014 disclosure and P/BV of 0.96x.