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Medium-volume liquidity mid December

2022-12-15

 Sahem Weekly Trading Report (11-15)-12-2022

With the approaching end of 2022, the general situation in Palestine Stock Exchange PEX is still associated to the local political and economic development anticipations, whereby no substantial issues arose this week that would support a particular price trend. While Al-Quds Index ended the week at the level of 639.67 points; up by 0.60% than the previous weekly closing level after trading in a relatively narrow range. While the PEX witnessed medium volume liquidity that was raised through executing two transactions in this week on the stocks of the largest investment company in the PEX by market capitalization – Palestine Development and Investment Company PADICO- by 3.00 million shares and the stocks of the National Insurance Company NIC by 0.21 million shares. On another hand, the anticipation increases for the coming days that coincide with the last days of the year, to crown the results of the whole year. Historically and routinely, the last days of the year is characterized with movements regarding the liquidity -on one hand- through moving between the investment positions and executing transactions, and the price trend movements on another hand, in order to affect the investment evaluation.

Regarding the economic indicators and according to the Palestinian Central Bureau of Statistics PCBS, the overall Consumer Price Index CPI for Palestine during November 2022 recorded a decrease by 0.36% compared with October 2022 (0.57% in Gaza Strip, by 0.33% in the West Bank, and by 0.17% in Jerusalem).  The decline in the Palestinian CPI during November 2022 were traced back to the decline in prices of the following expenditure sub groups compared with previous month: fresh chicken by 6.50%, fresh fruit by 6.33% and fresh vegetables by 4.65%, versus, an increase in the prices of potatoes by 8.82%, dried vegetables by 4.51%, liquid fuel for car “diesel” by 3.55%, liquid fuel for car “petrol” by 1.28%, short grain rice by 2.69% and eggs by 1.89%. The Palestinian CPI during First Eleven month of 2022 increased by 3.71% compared with same period of the previous year (4.62% in Jerusalem, 3.70% in the West Bank, and by 3.19% in Gaza Strip). The Palestinian CPI during November 2022 increased by 4.30% compared with November 2021 (5.16% in Jerusalem, 4.29% in the West Bank, and by 3.78% in Gaza Strip).

On the other hand, a report by Palestine Monetary Authority PMA showed that the inflation rate during the third quarter of 2022 was about 3.70% on an annual basis, compared to 3.90% in the previous quarter. Palestine is still witnessing relatively high inflation rates, mainly affected by the same factors observed in the previous quarter, represented by the high prices of primary commodities in the global markets, especially energy and food. Inflation rates among trading partners have also escalated due to many factors, mainly the effects of the Russian-Ukrainian war and the supply chain crisis. Therefore, these events resulted in a clear increase in the cost of imports and an increase in the prices of most commodities in the Palestinian consumer basket. The impact of these factors is expected to continue during the coming periods as well, as the PMA forecasts indicate an increase in the inflation rate during the third quarter of 2022, to about 3.9%, mainly due to the increase in the cost of imports and the rise in global food prices. It is also expected that 2022 as a whole will record an inflation rate of 3.70% on average, compared to the previous year.  These forecasts remain subject to some risks that may further increase the expected inflation or decrease it.