A Very Unhappy New Year

Despite the Palestinian Stock Exchange surpassing all others in the Arab world last year, the dawn of 2016 in the West Bank brought somber news:  the death toll of Palestinians killed by Israeli forces in East Jerusalem and the West Bank since October had risen to 142.  Another 15,000 had been injured, many of them seriously.

Many Israelis, too, now live in constant fear, even though their own dead and injured are a fraction of those killed “on the other side.”  No end is in sight, not least because Prime Minister Benjamin Netanyahu’s fragile coalition government is dependent on the most extreme Israeli settler movements, who regard occupied East Jerusalem and the West Bank as their own.

Al Aqsa Mosque, East Jerusalem, October 2015.  Credit:  EPA

Al Aqsa Mosque, East Jerusalem, October 2015. Credit: EPA

Measures by the World Bank and the Quartet–the body which represents the US, the EU, Russia and the UN–to focus on the development of the private sector in the West Bank, and the need to alleviate the very high levels of unemployment, give a ray of hope, as does the EU’s ruling last year on the labelling of produce from the Palestinian territories. But recent efforts by Tel Aviv to bolster the Palestinian economy with long overdue measures, such as giving 3G spectrum licenses to Palestinian telecoms firms at a time when 4G is standard, only confirm the pessimism of many in Ramallah, Jericho, Hebron, Bethlehem and Nablus, never mind Gaza City and Khan Younis, as well as East Jerusalem.  They increasingly doubt that the international community is willing to take the tough moves needed to change the rapidly deteriorating situation on the ground.

Now, more than ever, the impressive and growing solidarity of Palestine’s grass roots supporters around the world, combined with the faith and confidence of its investors and benefactors, especially in the diaspora, is needed.

We’ll be keeping tabs on all this, and, after a hiatus in 2015, we’ll again be giving you the news and insights you need on Palestine’s economy, including its vital political dimension.  Stay tuned…. and,

A Very Happy 2016,

from all of us here at InvestPalestine.

Pam

© Pamela Ann Smith

This is a publication of investpalestine.wordpress.com and is protected by international copyright laws. This article is for the reader’s personal use only, but may be re-distributed electronically with a credit to investpalestine.com.

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Global Investors Target the Palestine Stock Exchange in 2014

Both prices and trading volumes on the Palestine Stock Exchange (PEX) have scored impressive gains since the start of this year, thanks largely to investors from the Palestinian diaspora and Arab Gulf states. Recent decisions by such respected ratings agencies as Standard & Poor’s, Dow Jones and MSCI to include Palestine in their indices, as well as plans by London’s FTSE to follow suit, are now attracting other global investors from the UK, Europe, the US, Canada, Chile and elsewhere to the Exchange and to its leading companies, such as PADICO Holding, PalTel and the Bank of Palestine, analysts report.

Expectations that these moves will be followed by PEX’s inclusion in the global ‘Frontier Market’ indices is already fuelling demand from institutional investors, the analysts add. Its multi-currency platform, allowing trading in both US dollars and Jordanian dinars, as well as Palestine’s lack of capital controls, is also encouraging international interest. Trading volumes in January were more than two-fold higher than in December, and nearly four times as high as in January, 2013.

PEX's CEO, Ahmad Aweidah, expects 2014 to be a "threshold year."  Photo:  Mark Green, mark@nwmsltd.com.

PEX’s CEO, Ahmad Aweidah, expects 2014 to be a “threshold year.” Photo: Mark Green, mark@nwmsltd.com.

The Exchange’s Al Quds index broke through the 600 barrier in early February before falling back slightly on profit taking. It had risen 10.55 per cent in January alone, making it the second best performing stock market in the Arab world so far this year. Last year, the index registered an annual gain of 13.4 per cent, according to figures compiled by Ramallah-based brokers Sahem Investment and Trading. By the middle of February, the Exchange’s total market capitalisation had reached more than $3.5 billion.

Palestine's Stock Exchange is ahead of most other Arab markets.   Graph: Sahem Trading & Investment.

Palestine’s Stock Exchange is ahead of most other Arab markets. Graph: Sahem Trading & Investment.

This year could be a “threshold year,” the Exchange’s CEO, Ahmad Aweidah, told InvestPalestine.com. Speaking during a visit to London in mid-January to mark Palestine Capital Markets Day, he said “We are now achieving a series of important economic breakthroughs that could see our growth accelerate even more strongly.

He and other members of the Palestinian delegation, which included senior executives from PalTrade, PalTel, the Palestine Investment Fund (PIF), PADICO Holding, the Bank of Palestine, Sahem Trading & Investment and Lotus for Financial Investment, as well as Abeer Odeh, CEO of the Palestine Capital Market Authority, were hosted on the last evening of their visit to London by Baroness Morris of Bolton, UK Prime Minister David Cameron’sTrade Envoy for the Palestinian Territories, at a reception in Westminster organised by the Palestine British Business Council and its co-chairman, Antoine Mattar.

The Palestine Delegation to Palestine Capital Markets Day in London, 17 January, 2014.  From left to right:  Fida Musleh-Azar, PEX Manager of Public Relations & Investor Education; PEX   CEO Ahmad Aweidah; Ammar Aker, CEO, PalTel; John Davies, Vice-President, S&P Dow Jones Indices.  Photo:  Mark Green.

The Palestine Delegation to Palestine Capital Markets Day in London, 17 January, 2014. From left to right: Fida Musleh-Azar, PEX Manager of Public Relations & Investor Education; PEX CEO Ahmad Aweidah; Ammar Aker, CEO, PalTel; John Davies, Vice-President, S&P Dow Jones Indices. Photo: Mark Green.

Financial services, banking, ICT, infrastructure and high value agriculture, as well as tourism (including such world renowned attractions as Bethlehem, the Dead Sea and Jericho) were making strong progress, Aweidah told an audience of existing and potential investors. And, although economic growth has slowed recently as local entrepreneurs and international donors await firm progress on US Secretary of State John Kerry’s ‘peace initiative,’ Palestine’s GDP has grown by a remarkable 8.4 per cent a year on average during the past five years, he noted.

“The Palestine economy continues to demonstrate exceptional endurance despite political challenges,” Aweidah explained, a performance he attributed to the “strong and vibrant private sector,” its “well regulated and sophisticated financial system,” its “modern capital market,” and “advanced investor protection regime.” The majority of the 49 stocks on the Exchange, he pointed out, also “enjoy free float ratios that are comparable to advanced markets” as well as “reassuring turnover ratios.”

Foreign investors, both individual and institutional, are helping to boost values and volumes on the Palestine Stock Exchange.  Graph: PEX, Ministry of National Economy.

Foreign investors, both individual and institutional, are helping to boost both values and volumes on the Palestine Stock Exchange. Graph: PEX, Ministry of National Economy.

At the end of 2013, foreign investment in PEX amounted to just over 40 per cent of the total value of its shares, or about 34 per cent by volume. Investors from Jordan, many of whom are Palestinians with Jordanian citizenship, accounted for the majority of the foreign shareholders, 61.4 per cent, followed by others from the Americas at 10.9 per cent, the Arab Gulf with 6.6 per cent and Europe with 2.5 per cent. Palestinians made up 95 per cent of the total number of investors, demonstrating the widespread appetite for shares among smaller shareholders living both inside and outside Palestine.

Speaking to potential investors in London and to InvestPalestine.com, John Davies, Vice President at S&P Dow Jones Indices, explained why his firm, which now includes both the respected ratings agencies, Standard & Poor’s and Dow Jones, had established two stand-alone indices for Palestine last December. “We don’t build indices simply because we feel they are needed,” he insisted. “We build them because our clients are asking for them. The establishment [of the new indices] is evidence that there is significant demand for investment in Palestine.”

John Davies, Vice President at S&P Dow Jones Indices, explaining PEX's attractions to an audience of investors in London, 17 January, 2014.  Photo:  Mark Green.

John Davies, Vice President at S&P Dow Jones Indices, explaining PEX’s attractions to an audience of investors in London, 17 January, 2014. Photo: Mark Green.

The two new additions are the S&P Palestine Broad Market Index (BMI), which aims to capture at least 80 per cent of PEX’s market capitalisation, and the Dow Jones Palestine Total Stock Market Index (TSM), which aims for 95 per cent of the Exchange’s float-adjusted market capitalisation, Davies explained. Since testing began in September 2012, he added, the stand alone BMI index had achieved a 41 per cent cumulative annual return, a figure which compares favourably with the Pan-Arab Composition Index at 24.5 per cent and the S&P Composition Index at about 30.2 per cent.

Despite general skepticism about the progress of Kerry’s peace talks, investors are more confident that he will succeed in brokering a deal, the news agency, Bloomberg, quoted Aweidah as saying in mid-January. “If there’s a framework agreement, it’ll be a game changer” for the Exchange. There’s certainly a lot of optimism in the market about the direction of the political negotiations…. The time to invest in Palestinian stocks is now.”

Processing premium quality Medjool dates at a Palestinian-owned factory in the Jordan Valley.  The possibility of greater access to the fertile soil and water of the Israeli-occupied parts of the Valley and "Area C" as a result of the current negotiations between Israel and the Palestinian Authority is a major factor in encouraging both local and foreign entrepreneurs to invest in the West Bank.  Photo: fablenaturals.com.

Processing premium quality Medjool dates at a Palestinian-owned factory in the Jordan Valley. The possibility of greater access to the fertile soil and water of the Israeli-occupied parts of the Valley and “Area C” as a result of the current negotiations between Israel and the Palestinian Authority is a major factor in encouraging both local and foreign entrepreneurs to invest in the West Bank. Photo: fablenaturals.com.

Success in the talks would, according to a recent study by the International Monetary Fund, boost economic growth in the Territories by 35 per cent over the next five and a half years, or about 6.5% a year on average, compared with 1.5 per cent in 2013. This includes Palestinians gaining control of the land, water and resources in Area C, which forms almost two-thirds of the West Bank, which is currently under Israeli military occupation. The IMF adds that an agreement would significantly reduce the Palestinian Authority’s dependence on foreign aid, greatly enhance employment and lower poverty levels.Local entrepreneurs are investing in modern factories, like this one outside Hebron.  Photo:  Palden Jenkins.  paldywan.blogspot.co.uk Local entrepreneurs are investing in modern factories, like this one outside Hebron. Photo: Palden Jenkins, paldywan.blogspot.co.uk.

Business confidence in the West Bank is also rising, according to Palestinian analysts, because of higher optimism among entrepreneurs and in the industrial sector, especially in food, textiles, chemical, pharmaceutical, engineering, plastics and construction. The Palestinian Monetary Authority reported in mid-February that its monthly index, the PMA Business Cycle Indicator, had risen from minus 1.44 in the West Bank in January to a positive 8.25 in February. Negative business sentiment in the Gaza Strip also improved, as industrialists reportedly felt more optimistic about the continuous US efforts to stimulate the peace process between Palestinians and Israelis and less fearful of a continuing deterioration in security conditions. The northern West Bank city of Jenin is to be the site of a vital new power plant due to be built by a Palestinian company. Photo: Palden Jenkins, paldywan.blogspot.co.uk.

If an accord is agreed, Aweidah revealed, as many as four family-owned businesses in Palestine may also opt to sell shares on the Exchange through initial public offerings (IPO’s). The Palestine Power Generating Company (PPGC), he added, could follow suit.

PPGC is planning to build a $300 million power plant in Jenin in the West Bank which will be fuelled by gas from the giant offshore Leviathan field in the Mediterranean under a $1.2 billion, 20-year deal agreed in January. PPGC’s leading shareholders include the Palestine Electric Company, the builders of Palestine’s first independent power plant, and the industrial conglomerate, PADICO, both of which are quoted on the PEX.

© Pamela Ann Smith

This is a publication of investpalestine.wordpress.com and is protected by international copyright laws. This article is for the reader’s personal use only, but may be re-distributed electronically with a credit to investpalestine.com.

London Welcomes Palestinian Businesses

The CEOs and senior executives of some of Palestine’s most successful companies are in London tonight to promote the benefits of investment and trade with the private sector in the West Bank, Gaza and East Jerusalem.

We’ll be reporting more on their visit, which has been organised by The Palestine Trade Centre (PalTrade) and the excitement here that has greeted their upgrades by such prestigious international ratings agencies as S & P and, soon to be confirmed, their inclusion in the all-important “Frontier” markets of the FTSE and MSCI.

Ahmad Aweidah, CEO of PEX, and Ammar Aker, CEO of Paltel, open the London Stock Exchange on 24 June, 2011.

Ahmad Aweidah, CEO of PEX, and Ammar Aker, CEO of Paltel, open the London Stock Exchange on 24 June, 2011.

And that’s not to mention that some of them may also be listed on the London Stock Exchange in the future…a welcome tribute to their success on the Palestine Stock Exchange (PEX), not so much for their share price rises but for the impressive dividends they have paid internationally despite all the adversities they have faced, and continue to face, as well as for their remarkable p/e ratios.

Bank Of Palestine Sponsors The Events Of The World Cup In Palestine.  It's also helping to promote small- and medium-sized businesses in Palestine, especially for women.

Bank Of Palestine Sponsors “The Events Of The World Cup In Palestine.” It’s also helping to promote small- and medium-sized businesses in Palestine, especially for women.

Most importantly, we’ll also be reporting on the vital work companies such as the Bank of Palestine, PalTel and Padico do in supporting social entrepreneurship, sustainable development, the creative arts and scholarships to study abroad, as well as the more traditional charities, in the occupied territories.

Their role, given the hoped-for relaxation of Israeli restrictions on checkpoints, internal and external travel, shipments and communications and on the use of the agricultural riches of the Jordan Valley and “Area C”, could be immense in helping to reduce Palestinian unemployment and increasing the productive output, and exports, of the territories.

And that’s something that the USA, the UK and the European Union are eager to see, given the increased sympathy their publics have for Palestinian rights, as well as the growing reluctance of their taxpayers to provide unending foreign aid to the Palestinian Authority in Ramallah when an end to the Israeli occupation could make Palestine self-sufficient.

Watch this space,

Thanks for reading,

Pam

© Pamela Ann Smith

This is a publication of investpalestine.wordpress.com and is protected by international copyright laws. This article is for the reader’s personal use only, but may be re-distributed electronically with a credit to investpalestine.com.

Palestine’s Economy: Bright Prospects for the Private Sector

Whatever the state of ‘peace talks’ to end the Israeli occupation and create an independent Palestinian state, or of protests in the West Bank, the coming months and years are likely to see a renewed focus on the private sector economy in the West Bank, Gaza and East Jerusalem. Investment —- from Palestinians in the diaspora, private Arab funds and foreign corporations, as well as from important ‘donors,’ such as the World Bank, the US Overseas Private Investment Corporation (OPIC), the UK, the European Union, Japan and Canada — is increasing, reflecting the sector’s remarkable resilience in the past few years, and its huge potential in the medium-term.

Expotech runs from 6 to 11 October in Ramallah andGaza. Graphic: PITA, in the October issue of The Middle East magazine.

Expanding and developing it further is now also seen as crucial to stemming unemployment and rising prices, particularly among the youth in Palestine. This would also help to make the economy less dependent on Israel and foreign aid. Continue reading

Palestine in The Middle East magazine

One of the main aims of InvestPalestine.com is to promote the bright prospects for the Palestinian economy—and the advantages of investing in it – in the international media, both print and digital. Here’s one example, a 10-page Special Report on Palestine: Building Bridges to the Future, that appeared in the October issue of the London-based, pan-Arab, English-language monthly, The Middle East, which is due to be available online in the coming week. Alternatively, you can pick up the magazine at your local newsstand, or subscribe.

Reaching international readers: A Special Report from the London-based, pan-Arab monthly, The Middle East and InvestPalestine.com.

http://www.themiddleastmagazine.com
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Editor’s Note: Here’s What’s Happening

InvestPalestine.com has been busy this month, promoting a ‘Special Report’ on The Palestinian Economy: Bright Prospects for the Private Sector, which is due to appear in the London-based, pan-Arab monthly, The Middle East, on the 1st of October.

It includes an exclusive interview with the CEO of the Bank of Palestine, Hashim Shawa, which we’ll bring to you then… plus other stories on PalTel, the HUGE start-up potential of Palestinian information technology firms (and the ExpoTech exhibition in Ramallah and Gaza) … plus information about the new investment funds springing up in Palestine … as well as new ventures from the UK to promote Palestinian exports and scholarships and training for young Palestinians.

A fruit and vegetable market in Ramallah. In the end, it’s all about feeding the family…ideally, with LOCAL produce. Mohamad Torokman/Reuters

Meanwhile, look out for our Special Feature on Palestine’s Agriculture: Its Untapped Potential, later this week which takes a look at the tens of thousands of jobs that this sector could create in the future, as well as its enormous potential to promote Palestine’s exports to world markets.

Thanks for reading,

Pam

P.S. Click on the “Subscribe” button at the top right of the home page if you would like to receive FREE emails on future posts, or email pamansmith@compuserve.com if you would like to suggest ideas for, or comments on, the editorial content.

UK Targets Palestinian ICT & Telecoms

The UK government, along with a growing list of international ICT giants such as Google, Microsoft, Cisco and Intel, is the latest to recognise Palestine’s huge potential in information communications and technology given its highly talented younger generation, which is fluent in English and Arabic, as well as in entrepreneurial and engineering skills.   Britain’s Minister for Culture, Communications and Creative Industries, Ed Vaisey, says that his government hopes to get Palestinian and UK businesses “to work together,” and that it will actively seek to encourage British companies to “come and start business in Palestine.”

He was commenting during a visit to Ramallah in March that also included a tour of the headquarters of Palestine’s telecommunications corporation, PalTel, which, with its subsidiaries Jawwal and Hadara, provides the majority of Internet, landline and mobile services in the West Bank and Gaza.  PalTel, which is a favourite of international investors on the Palestine Securities Exchange, reported a 5.1 per cent increase in profits last year, to $128 million, despite the difficulties of the Israeli occupation in the West Bank, Gaza and East Jerusalem.  Thanks to an intensive expansion programme, it has now extended its services to the Jordan Valley region, and is planning to invest an additional $70 million to $80 million by the end of this year in new fibre optic and mobile phone infrastructure, primarily for the Internet.

PalTel’s CEO, Ammar Aker

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Editor’s Note

Spring has arrived for many of us, not least for Palestine, where the hills of the West Bank are breaking out in ever more patches of green and lavender – as I saw on my trip there last week.

I’ll be writing about that and about some of the projects I visited in Jericho, Ramallah, Jerusalem and Jordan, thanks to JICA, the Japan International Co-operation Agency.

Other stories coming up this April include:

• The Jericho Agro-Industrial Park and its use of solar energy;

• The Palestine Stock Exchange and its IPO;

• The UK’s new ICT initiative;

• PalTrade’s plans to promote exports.

Palestine’s first delegation to the Olympics, Atlanta, 1996; Reuters

Last, but not least, we’ll be highlighting the progress of four world-class athletes from the West Bank, Gaza and East Jerusalem as they prepare to fly the flag for Palestine at the Olympics here in London in July.

Thanks for looking!

— Pam

Palestine’s Growth Attracts New Investment Funds

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.

Munib Al-Masri, Chairman of Padico Holding, outside his home in Nablus. Padico is a favourite of international investors.

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.

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Palestine Stock Exchange 2nd Best in Arab World

The Palestine Stock Exchange’s Al Quds Index is reporting modest gains this year, in line with global trends, despite the upheavals in the Arab world, closing at 480.82 on February 15. It ended 2011 at 476.93, marking a loss of 2.6 per cent for the year, according to reports from the PSE.

Despite the losses last year, the PEX came second in the list of Arab exchanges, just behind Qatar — the only one to report a rise. It ended 2011 with a gain of 1.12 per cent.

The market capitalisation of the PEX rose 13.6 per cent on the back of seven new listings in 2011, reaching $2.78 billion compared to $2.45 billion in 2010. New entrants included Wataniya Palestine Mobile Telecommunications, Union Construction and Investment, Golden Wheat Mills and Alrafah Microfinance Bank.
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