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Al-Quds Index hits 2014’s low


Weekly Trading Report [18-22/05[ 2014

The block out in the political horizon and its direct impact on the local economy is one of the most apparent reasons for the poor trading and the continuous decline in Palestine Stock Exchange PEX. With multiple causes and effects, the result is sluggishness in the PEX performance amid conservatism among investors that is hard to predict its magnitude and continuation due to its correlation with a radical political solution despite the feasible returns of the listed companies. With the lack of liquidity amid slow price movements, Al-Quds Index declined, this week, to its lowest level recorded during 2014, to wipe out the gains that exceeded 11% in February in its attempts to break the 600 points level, to end with a loss of 6.5% during 2014. Undoubtedly, the observer of the PEX can track the dividends distributions’ effect -especially for the leading companies- in the drop of Al Quds Index during May 2014, especially with the quasi-absence of any update in the political and public aspects, affected by the momentum of movements between the companies’ shares in order to grab a larger amount of dividends distribution.

During this week trading and later to the cash dividends distribution of the largest investment company by market capitalization in the PEX and what followed it of the so called ex-dividends exits- even if slight-, the share of Palestine Development and Investment Company PADICO declined by 4.32% amid the absence of liquidity especially the institutional liquidity. Moreover, the general assembly GA of PADICO approved, on its meeting on 19/05/2014, distributing 6% cash dividends for the year 2013, to record dividends yield of 4.32%.  During the GA meeting, PADICO’s management discussed the company’s future plans that are summarized in maintaining the current investments and developing them, in addition to completing the projects under constructions and improving the performance and profitability of the current existing projects. Regarding strengthening the liquidity and reducing the company’s debt and administrative expenses, PADICO will continue to implement its plans of reducing the general and administrative expenses and debt consistently in the coming years.

Within the lack of incentives and declining the pace of holding the GA meetings, Palestine Investment Bank PIBC will be holding its GA meeting on 11/06/2014 to discuss the board of directors’ decision of distributing 3% cash dividends and 3.77% stock dividends. The number of listed companies that approved distributing dividends and raised a recommendation on this matter reached 22 companies out of 49 listed companies in the PEX. The total cash dividends distributed and will be distributed reached $147.95 million for the year 2013, with a total dividends yield of 6% compared to the market capitalization of the listed companies that distributed dividends.  It is worth mentioning that the overall cash dividends distributed for the year 2013 increased by 16.6% compared to the year 2012 due to an increase in the distribution policy of several leading companies after the significant growth in the financial performance of 2013.








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