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Jafar Sadaqa wrote:
Palestine Investment Fund and Bank of Palestine in addition to other investors purchased yesterday, the share of Global Investment House "Global" within 4 institutional transactions totaling approximately $15 million.
The number of shares owned by Global, which was experiencing financial difficulties, are about 12 million shares accounting for more than 30% of the paid up capital of about $ 38.40 million, of which 4 million shares registered in the name of the Kuwaiti company that represents 10% of the bank"s capital and had been purchased by Palestine Investment Fund, while the remaining share is under the names of related companies for Global.
Bank of Palestine bought about 5.57 million shares in the Arab Islamic Bank (14.5% of the total paid-up capital), while the two companies "Farah for electrical and health equipment" and "Yamama for public investment" which are two companies related to the businessman Tawfiq Fakhouri, the largest shareholders in the bank , shared the remaining shares (about 2.60 million shares).
The four transactions were executed through Palestine Securities Exchange at the level of $1.25 per share. The shares of Arab Islamic Bank closed yesterday at the level of $1.27 advancing by %2.42.
The Chairman of Board of Directors and the Chief Executive of Palestine Investment Fund Dr. Muhammad Mustafa said that the initiative of the Fund"s purchase of 10% of the shares of the Arab Islamic Bank is "as part of the process of developing the Fund"s investment portfolio in the local stock market, especially in the financial sector."
and added " We are interested in the financial sector, where we started lately purchasing shares in some banks, within our investment strategy in Palestine, which particularly needs banking windows in housing sector. Arab Islamic bank provides us with an Islamic financing window needed to fund the program of the mortgage".
The fund with an international and local partnership launched a company for financing the real estate mortgage with a value of half a billion dollars, as part of a long-term housing program includes the construction of residential neighborhoods to low-income people in various provinces of the West Bank and Gaza Strip.
Mustafa stressed that the share purchase from Global in Arab Islamic Bank "were not a matter of exploitation need of selling to provide liquidity, but of our confidence in the bank"s performance in the light of its financial results, as it achieved a net profit of about $4.3 million in the year 2008 growing from about 3.4 million in the year 2007".
He continued "Global transactions were on good prices, and were on order without confusion, and reflected the desire and interest by the buyers".
Mustafa has not ruled out the Fund to buy shares in other companies.
He said "we seek to develop our portfolio in the Palestinian Territory at the expense of investment abroad, a strategy initiated by the Fund before about 3 years. There are four criteria to determine the purchase of shares by the Fund: the attractiveness of investment with the proportionality of our strategy, and the existence of good partners, and to contribute to the diversification of investment. Within this set of criteria, the Fund is to buy shares in the local companies".
For his part, the Chairman and the General Manager of Bank of Palestine Mr. Hashim Al Shawa said the bank had bought a strategic stake in the Arab Islamic Bank.
He said in a statement received by Al-Ayyam newspaper " we look for the relationship with the Arab Islamic Bank as a continuous strategic relationship, and we are sure that this deal will benefit the two banks and will increase the confidence of investors and citizens in the domestic market, and will enhance the performance of the banks through joint cooperation, particularly the two banks" activities are different which will provide diverse and comprehensive services for clients".
He noted that the Bank of Palestine, "is pursuing a deliberate strategy to increase and diversify its investments in the major Palestinian companies (...) as a local economic and leading national institution which plays an important role in domestic investment and to study the investment opportunities available in accordance with the requirements and criteria that can return on the bank"s investment and the national economy growth and expansion".