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The PEX records an average PE of 11.1x in Q1 2017

2017-05-11

Sahem Weekly Trading Report (07-11)-05-2017

Palestine Stock Exchange PEX witnessed an increase in liquidity levels this week due to executing a transaction of 0.74 million shares on the stocks of Sanad Construction Resources Company SANAD, to top the PEX in this week by 26.50%. This followed the company’s announcement of signing a partnership agreement with the Jordanian Manaseer Cement and Mining Company, to become a partner with Palestine Investment Fund PIF in SANAD. According to the agreement, Manaseer Cement and Mining Company will purchase $47 million of SANAD’s shares from the stake of ASWAQ Company for Investment Portfolios -the investment arm of the PIF in the securities sector-. On the other hand, the dividends’ entitlements for the year 2016 continued, whereby, Ramallah Summer Resorts Company RSR approved distributing 7% cash dividends, to record dividends yield of 2.59% based on the price on the entitlement date. Also, Al-Quds Bank QUDS approved raising its paid-up capital to $68.38 million through distributing 12% stocks dividends. On the other hand and with the disclosures’ completion of 46 companies out of 49 listed companies required to disclose their data by the end of the first quarter of 2017, the PEX records an average PE ratio of 11.1x and an average P/BV of 1.13x.

Regarding the data of the PEX’s sectors, the banking and financial services’ sector contributed in 31.50% from the total disclosed companies’ profits attributable to the parent companies. Whereby, 86% of the companies in the sector recorded profits by the end of Q1 2017. According the disclosed data, the average PE of the sector records 10.5x, and average P/BV hit 1.27x. This followed an increase of 25.23% in total sector’s profits attributable to the parent companies. While, Bank of Palestine BOP constitutes the lion’s share of 49.26% from the total achieved profits attributable to the parent companies in the sector. In the insurance sector, half of the disclosed companies in the sector recorded an increase in profits attributable to the parent companies in Q1 2017, while, the other half reported a decrease in profits compared to the corresponding period of 2016. In this context, the sector’s profits attributable to the parent companies grew by 37.09% in Q1 2017. According to the disclosed data, the insurance sector records an average PE of 6.2x- the lowest value among all sectors-, and records an average P/BV of 1.27x.

On the other hand, the profits attributable to the parent companies in the services sector contributed by the highest percentage of 34.53% from the total disclosed companies in the PEX, where 70% of the disclosed companies in the sector achieved profits attributable to the parent company in Q1 2017; 29% of the disclosed companies posted growth in profits, while, the remaining companies recorded a decline in profits. However, 30% of the disclosed companies realized losses in the same period, while; two companies didn’t disclose their financial results for Q1 2017 during the legal period granted by the PEX. Whereby, Palestine Telecommunications Company PALTEL’s profits contribute in 92.60% from the total sector’s profits attributable to the parent companies, in which decreased in total by 23.73% compared to the corresponding period of last year. According to the disclosed data, the sector records average PE of 11.5x, and average P/BV of 1.21x.

On the other hand, the investment sector’s profits attributable to the parent company contribute in 14.59% from the total disclosed companies’ profits attributable to the parent company, while, the investment sector’s profits attributable to the parent companies increased by 5.22% in Q1 2017, to record the lowest value of average P/BV within the sectors of 0.89x and an average PE of 16.03x. Regarding the Industry sector, it witnessed an increase in the sector’s profits attributable to the parent companies by 33.35% in Q1 2017; constituting 12.08% from total sector’s profits attributable to the parent companies, whereby, Birzeit Pharmaceuticals BPC and Palestine Poultry AZIZA achieved the highest profits, in which both contribute for 49.67% from total sector’s profits attributable to the parent companies. Accordingly, the Industry sector records an average PE of 8.8x and average P/BV of 1.09x.