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The PEX records average PE of 13.4x and average P/BV of 1.19x

2020-02-27

Sahem Weekly Trading Report (23-27)-02-2020

In the last week of February, Palestine Stock Exchange PEX witnessed medium liquidity levels, which were raised through executing several transactions of the leading stocks and others during the week, coinciding with the end of the legal granted period for the annual disclosures and raising the proposals of distributing dividends for the shareholders. Whereby, some dividends distribution recommendations were raised during the week. In this context, the board of directors BOD of the Vegetable Oil Industries VOIC raised a recommendation to the general assembly GA, which will be holding a meeting on the second half of April 2020, to distribute 60% cash dividends for the year 2019, to record dividends yield of 4.55% based on the current market price. Also, the BOD of the Arab Islamic Bank AIB proposed to the GA, which will be holding a meeting on 25/03/2020, raising the bank’s paid-up capital from $84.92 million to $88.47 million through distributing 4.18% stocks dividends for the shareholders. It also recommended distributing 4.70% cash dividends for the year 2019, to record dividends yield of 2.69% based on the current market price. In addition, the BOD of the Golden Wheat Mills Company GMC proposed to the GA which will be holding a meeting on the second half of April 2020, distributing 6% cash dividends for the year 2019, to record dividends yield of 7.50% based on the current market price. However and regarding the annual disclosures, and with the completion of the announcements of 45 listed companies out of 48 required to disclose their financial data by the end of 2019, the PEX records an average PE ratio of 13.4x and an average P/BV of 1.19x. 

Regarding the data of the PEX’s sectors, all the companies in the banking and financial services’ sector achieved profits at the end of 2019, whereby, 43% of the banks recorded growth in profits during the period. However, the sector’s profits contributed for 28.82% from the total disclosed companies’ profits attributable to the parent company. According to the disclosed data, the average PE of the sector records 14.0x, and average P/BV of the sector reports 1.22x. This followed a decline of 17.13% in total sector’s profits. On the other hand, the profits of Bank of Palestine BOP constitute the lion’s share of 41.52% from total achieved profits in the banking and financial services’ sector.

In the services sector, 88% of the listed companies in the sector achieved profits at the end of 2019, and on the top comes Palestine Telecommunication Company PALTEL, which constitutes 85.93% from the total sector’s profits. While, only one company realized net loss for the year 2019, and three companies couldn’t disclose their financial data within the legal granted period. On the other hand, the sector’s profits constitute 36.99% from the total disclosed companies’ profits attributable to the parent company; the largest contribution among all sectors. Accordingly, the sector records average PE of 11.9x and average P/BV of 1.34x. Regarding the insurance sector, all listed companies in the sector achieved profits at the end of 2019, while 71% of the companies that achieved profits witnessed a decrease in their profits. According to the disclosed data, the sector records average PE of 13.5x and average P/BV of 1.32x.

In the same context, the profits of the listed companies in the industry sector constitute 13.58% from the total disclosed companies’ profits attributable to the parent company. Whereby, Birzeit Pharmaceuticals BPC and the Vegetable Oil Industries Company VOIC achieved the highest profits, where both contribute for 49.17% from total sector’s profits. Accordingly, the sector records average PE of 10.1x; the lowest among all sectors and average P/BV of 1.08x. Moreover, the investment sector records the highest PE ratio among all sectors of 19.2x and the lowest average P/BV among all sectors, with an average of 1.01x. On another context, the sector’s profits contribute for 14.79% from total sectors’ profits. On the other hand, the sectors’ profits increased by 40.34% in 2019 compared to the corresponding period of the year 2018.