By The Palestine Exchange (www.pex.ps)
FOR nearly 14 years, the Palestine Exchange (PEX) grew under challenging political and economic conditions. It has positioned itself as a robust exchange among its emerging markets peers with an average return on investment of about six percent over the past five years.
PEX was fully automated upon establishment – a first among Arab Stock Exchanges – and operates under the supervision of the Palestinian Capital Market Authority. PEX enjoys modern technologies; it employs trading (NASDAQ OMX), surveillance (Smarts online) and CDS state of the art systems to ensure fair and equal trading.
There are 45 companies listed on PEX as at 18 October 2011 with market cap of some $3 billion across five sectors: Banking and Financial Services, Insurance, Investments, Industry, and Services. Most companies trade in Jordanian dinar, while others trade in US dollars. Currently, only common shares are traded on PEX but there is a potential and readiness to trade other instruments. PEX has ten member brokerage firms with offices and branches in most Palestinian cities.
2010 saw the most generous dividend distribution underlining the outstanding performance of many PEX listed companies, 35 out of 46 companies were profitable in 2010 and dividends exceeded $152m, with an average return on investment of 13.6 percent for the year. Dividend ratio to market CAP of listed companies averaged seven percent in 2010.
Palestine has a friendly investment environment and an encouraging legal and regulatory environment vis-à-vis foreign investment in the exchange. There are no capital gain taxes and no income tax on the revenues generated out of trading. HSBC Middle East provides global custody services to interested foreign clients. Recently the World Federation of Exchanges (WFE) promoted PEX status to “Affiliate”. This announcement has come to recognize the progress PEX made in its business development over the last few years as well as its advanced and efficient working environment.
Corporate Strategy:
* Listing PEX on Middle East frontier indices (MSCI, FTSE, S&P).
* Seeking WFE full membership.
* Enhancing efficient IR practices and good governance among listed companies.
* Educating Investors
* Quality listing of new companies
* Contact: fida.azar@pex.ps
PEX milestones:
1995: Established as a private shareholding company
1997: First trading session (18 February)
2005: The Al-Quds Index increased 306% compared to close of 2004, the highest gain of any stock
2006: Launched the Investor Education Program
2007: Launched the E-Trade Service
2009: Ranked 33rd among global stock exchanges and 2nd in the region in terms of investor protection
2010: Became a public shareholding company responding to principles of transparency and good governance