FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
PALESTINE SECURITIES EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Political Developments
During the year 2007, the Palestinian
Territory witnessed dramatic changes and
developments, from one side the Palestinian
political map changed radically at the results
of 14 June events that led to the separation
between West Bank and Gaza strip, on the
other the Palestinian economy keeps closed
to its average growth rate this year which did
not exceed 2% according to official sources.
Taking into account the financial blockade
was eased, followed by an international
conference in Ana Police – USA to activate
the peace process in the Middle East, and
later the donor conference held in Paris,
aiming to provide the required financial
support from the International community,
given these evidence it is expected that the
Palestinian Economy to realize better
performance in the coming months, and this
situation will be directly impacted by any
further complications in the Palestinian
territory.
Economic Developments
By the end of the year 2007, the number of
the Palestinians exceeded ten million people;
four million of them live in the Gaza Strip and
the West Bank including Jerusalem.
From an economical prospective, statistics
at the end of the year 2007 shows that the
revenues of the Palestinian National Authority
during 2007 is estimated to reach 600 million
US dollars in comparison to 1,290 million
dollars during 2005 with a drop of 55%. The
main reason behind this decline is the
current situation in PT (decline in collecting
local revenues), and also due to Israeli
government measures which resulted in
halting the transference of the Palestinian
taxes revenues on a monthly base. The
donations received by the Palestinian
Authority during the first three quarters of
2007 reached 668,748,936 dollars, tout of
867,013,066 dollars committed for the whole
year, that is, nearly of the amount donated
during 2006, taking into account the results
of the Donor conference hosted by France in
December 2007 to support the Palestinian
government Plan for the next three years
where a 7 Billion US $ are committed by
Donors to finance government plans for this
period.
ratio2 increased in the Palestinian Territory
from 4.8 to 5.6 between the 3rd quarter 2000
and 3rd quarter 2007 (the change rate is
16.7%) which negatively impacted the level
and standards of living and poverty levels in
Palestine.
Impact of the economical situation
on the PSE
Despite the political and economical
deteriorations, the Palestine Securities
Exchange (PSE) stands on a solid ground,
as it on both directions; improving the
performance of the market, and improving
the investment environment in securities
market, which enables PSE to achieve
outstanding results in the year 2007 although
they were less than 2005. This goes in line
with the case of the markets in the region as
most of the Arab exchanges witnessed deep
correction movement following the dramatic
rises of stock prices in 2005 that was not
anticipated by most observers. In 2007, the
PSE held 248 trading sessions with
approximately 160 thousand transactions
were executed with a value that goes around
US$ 8 millions. Despite the drop of Al-Quds
Index at a percentage of 15.00% compared
with 2006, all indicators show that at any
positive development in the political situation
in Palestine will be reflected immediately at
the economical circumstances and the
PSE.*
The preliminary estimates of the GDP at
constant prices for the third quarter 2007
shows an increase by 0.9% compared with
the second quarter 2007, and showed an
increase of 1.2% compared to the third
quarter of the year 2006, this performance
still below its levels in previous years, as its
declined by 10.3% compared to the third
quarter of the year 2005.
According to ILO standards; The percentage
of persons who don't work, but seeking job
increased from 19.2% in the 2nd quarter
2007 to 23.2% in the 3rd quarter 2007,
compared with 10.0% in the 3rd quarter 2000
(before the beginning of Al-Aqsa Intifada).
On the other side economic dependency
* Information provided by the Palestinian Stock Exchange
Key Information Contacts
Palestine Capital Market Authority: www.cma.gov.ps
Ministry of Finance: www.mof.gov.ps
Ministry of National Economy: www.met.gov.ps
Palestinian Investment Promotion Agency: www.pipa.gov.ps
Palestine Monetary Authority: www.pma-palestine.org
Palestinian Central Bureau of Statistics: www.pcbs.org.ps
Palestinian Economic Council for Development and Reconstruction: www.pecdar.org
Palestine Institute for Financial & Banking Studies: www.pifbs.com
Palestine Media Center: www.palestine-pmc.com
Custodian Bank - HSBC Bank Middle East: www.middleeast.hsbc.com
Settlement Bank - Arab Bank Palestine: www.arabbank.ps
ECONOMIC RATIOS
GROWTH OF INVESTMENT AND GDP (%)
Palestine
Lower-middle-income group
GDI
Trade
Domestic
savings
Investment
Indebtedness
PAGE 116
10
0
-10
-20
-30
-40
-50
-60
-70
-80
97
GDP
98
99
00
01
02
03
* World Bank reports