Palestine Stock Exchange in crisis, could closegreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
PA stock exchange in crisis, could close
Lior Greenbaum 19.03.2001 15:52 The Palestine Stock Exchange (PSE) has been in deep crisis since the outbreak of the al-Aqsa Intifada, and could close down, Palestinian Authority sources say. Trading on the PSE has sharply declined since the outbreak of violence, and share prices for PSE-listed companies have dropped dozens of percentage points.
The Nablus-based PSE is owned by the Palestine Development and Investment Company (PADICO), and has 24 listed companies. Since the outbreak of the Intifada, the PSE has been operating on a reduced scale, although it recently returned to a 5-day trading week. PSE general manager Naim Khushashi said the crisis has not been caused by volatility on world stock exchanges, with which the PSE has little contact. “We are affected more by the security disturbances and political and social instability than by the world’s stock exchanges,” he said.
Khushashi said the security disturbances did not initially affect the PSE, and that the deterioration in its operations began only after the beginning of the year. “In 1999, the PSE was considered to be the most profitable stock exchange in the Arab world. Even at the end of 2000, we were ranked third among Arab stock exchanges in terms of profit, behind Saudi Arabia and Tunisia,” he said.
Although Khushashi expressed cautious optimism, others were more concerned about the PSE’s future. Palestinian Target Securities Company (al-Hadaf) chairman Salah Almasry said trade volume on the PSE since the beginning of the year has totaled only $4 million, compared to $60 million during the corresponding period last year.
Al-Masry said the PSE has become a “sellers only” market, because most investors need cash and want to sell shares, but there are no buyers. He added, “Foreign investors have completely abandoned the PSE, and only local players have remained. Even if the peace process resumes, 2001 is a catastrophe for us. If the situation does not improve, there is a real fear the PSE will close.”
Khushashi said in response that several scenarios which will allow the PSE to continue operations are under review, and added that closing the exchange is not on the agenda.
Published by Israel's Business Arena on 19 March 2001
-- Martin Thompson (firstname.lastname@example.org), March 19, 2001