Confidence in Palestine’s regulatory framework and in the resilience of the Palestine Stock Exchange in the wake of turmoil in the Arab world* is helping to boost both regional and foreign interest in its new investment funds, officials and analysts report. So too is the growing possibility that the Palestine Stock Exchange (PEX) will be added to the MSCI Frontier Markets Index, which currently groups 26 countries including Nigeria, Kenya, Vietnam, Kazakhstan, Pakistan and Jordan as well as the Arab oil exporting countries of Qatar, Kuwait and the United Arab Emirates.
Launched in May, 2011, the Luxembourg-based Rasmala Palestine Equity Fund is currently trading almost 5 per cent below its peak, but above the lows reached in November in the aftermath of the Palestinian bid for statehood at the UN and the withdrawal of substantial aid funds from the US, as well as the temporary halt in tax revenue transfers by Israel. Beginning with $15 million, provided in part by the Palestine Authority’s Palestine Investment Fund, it is open-ended and is expected to reach up to $100 million by mid-2014. RPEF is targeting a diversified portfolio of growth and value stocks listed exclusively on PEX, as well as initial public offerings (IPOs) and Palestinian firms which may be considering IPOs. Favoured sectors include telecommunications and pharmaceuticals as well as banking and investment.