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Lack of liquidity with increasing the anticipation for 9M disclosures


 Sahem Weekly Trading Report (18-22)-10-2020

Al-Quds Index increased in this week by 0.18% than its previous weekly closing, to record 436.82 points level. Moreover, the trading movements relatively slowed parallel with 9M 2020 financial and operational data disclosures anticipation especially for the leading companies. However, the legal quarterly period for the first nine months of the current year ends with the end of October 2020, while the disclosures haven’t exceeded 20% out of 46 listed companies by the end of the business week, whereby, the next week is expected to witness disclosures’ momentum that include some of the blue-chips and high turnover companies. In all cases, the expected 9M financial data will build more on what has been established by many of Palestine Stock Exchange PEX’s constituents’ components.

Regarding the disclosures of the banking and financial services sector, Al-Quds Bank QUDS noted posting net income attributable to the shareholders of the parent company of $7.91 million in 9M 2020, compared to $8.24 million in the corresponding period of 2019. This mainly followed a slight decline of 1.76% in the bank’s net interests and commission income. Based on the disclosed figures, QUDS records book value BV of $1.24 and P/BV of 1.10x. In the investment sector, Union Construction and Investment Company UCI noted posting net income of $0.16 million in 9M 2020, compared to $0.69 million in 9M 2019. This mainly followed a decline in the company’s revenues especially revenues from selling housing units, which declined by 84.73% in 9M 2020. Based on the disclosed figures, UCI records BV of $1.23 and P/BV of 0.38x.

On the other hand, a recent report by the World Bank shows that after three consecutive years of economic growth of less than 2%, the year 2020 has proved to be a very difficult year. Whereby, the Palestinian economy is facing three crises (one is worse than the other): the Coronavirus pandemic, a severe economic slowdown, and the conflict between the Palestinian Authority and Israel, which disrupts the transfer of the clearing revenues. According to the report, the Palestinian economy witnessed a contraction by 4.9% in Q2 2020 on a quarter-to-quarter basis compared to the previous quarter, and by 3.9% on a year-to year basis compared to the same quarter in the year 2019. The World Bank noted that it is expected that the Palestinian economy will be contracted by 7.9% at the end of the year 2020, but will witness a slow-pace growth of 2.3% in the year 2021 and 2.4% in the year 2022.   




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