Palestine’s Stock Exchange: Wooing Global Investors

Palestine’s Stock Exchange (PEX) continued to outperform all other Arab markets in the first half of this year on the back of a fast-growing economy and investor-friendly regulations. Its success has prompted a number of prominent Palestinian companies to consider initial public offerings (IPOs), a move that would further open the stock market to private and foreign investors. In June, the Exchange completed a highly successful “road show” in London, which featured the nascent state’s largest holding company, Padico, as well as Paltel, Wataniyya, the Bank of Palestine and the UAE-backed Rasmala Palestine Equity Fund.

Ahmad Aweidah, CEO of PEX, and Ammar Aker, CEO of Paltel, open the London Stock Exchange on 24 June.

The Exchange’s “Al Quds Index” grew by 0.64 per cent from January to June, compared to the end of 2010, while its market capitalisation increased from $2.5 billion to $2.8 billion. In contrast, all the remaining Arab stock markets reported falls in the first half of this year, ranging from less than five per cent in Abu Dhabi, Saudi Arabia and Qatar, to 25 per cent in Egypt and 40 per cent in Syria. In 2010, the average return on investments in Palestine amounted to 13.6 per cent, according to PEX officials.

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New cities, New malls, New resorts

Private and foreign investors have launched huge new projects in Palestine’s real estate sector which are set to transform the economies — and living standards – of the West Bank and Gaza. One of the most interesting is the huge new planned city of Rawabi, situated just north of Ramallah, which is being developed at a cost of $850 million by the Bayti Real Estate Investment Company, a joint venture of Qatari Diar and the Ramallah-based Massar International.

Architect's image of the city Rawabi, being built north of Ramallah

Drawn from an Arabic word which means “to mend, to repair, to make peace,” Rawabi will feature gleaming high-rise buildings to make the most of the available land, as well as green parks, a hotel and convention centre, a business district and shopping areas. It will provide more than 5,000 affordable housing units, spread across 23 neighbourhoods.
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Palestine’s Own Currency?

The Palestine government plans to establish its own central bank and currency in the coming months, according to Jihad Wazir, head of the Palestinian Monetary Authority. Speaking at a conference held at Najah University in Nablus in late April, Wazir said four offices covering legal, ethics and audit affairs, as well as an ombudsman, had already been set up for the bank following studies conducted during the past three years. It would be “independent” and would mean a “bank capable of introducing a strong Palestinian currency.”

Palestine had its own currency, the Palestinian pound, prior to the establishment of the State of Israel in 1948. At present, banks in the West Bank and Gaza deal in a number of currencies, including the US dollar, the Jordanian dinar and the Israeli shekel, which is used for mainly for trade. Establishment of the bank, Wazir indicated, would enable it to regulate the flow of hard currency to and from the Palestinian territories.

An earlier version of this article appears in the July issue of The Middle East magazine.

© Pamela Ann Smith

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Palestine’s Economy: Is It Ready for Serious Investors?

Padico, a huge holding company in the West Bank whose interests run from telecoms and plastics to hotels and real estate, hit the global headlines in May when it became the first Palestinian company to raise a corporate bond — worth $70 million — in the international markets. Its success is seen as a sign that both private and foreign investment in the territories is about to increase markedly as the prospect of the UN’s recognition of Palestinian statehood looms in September.
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