While the stock exchanges in Abu Dhabi, Egypt, Jordan and Saudi Arabia were showing impressive year-to-date gains of more than 100% by Nov. 30, the upstart PSE was way out in front with a gain of 366%. The booming Middle Eastern markets have been riding on an unprecedented period of economic expansion, resulting from a combination of high oil price levels, repatriation of capital, and low interest rates.
In November alone, the PSE’s Al-Quds Index increased 37.07%, to close the month at 1295.08. At the end of 2004, the index was more than 1,000 points lower at 277.56. November trading volume totaled 48 million shares, the second highest this year, bringing the year-to-date volume total to 330 million shares.
The PSE’s market capitalization of approximately $5.0 billion means it is still a small player compared with its neighbors -- the Gulf Cooperation Council (GCC) markets, for example, have a combined market cap of more than $1 trillion. However, only five years ago, the GCC market cap was at $120 billion, which points to the potential for the PSE’s future growth, according to David Grayson, Managing Director of global brokerage firm Auerbach Grayson & Company, New York.
“We are already seeing our institutional clients in the U.S. execute orders on the PSE, and this trend will combine with local and regional activity to give further impetus to the PSE’s growth,” according to Mr. Grayson. The U.S. orders are executed on the PSE via Auerbach Grayson’s local partner, Atlas Investment Group of Amman, Jordan. The exchange has seven locally-established member firms.
Comments Omar Masri, Managing Director of Atlas: “After chalking up the best performance in the region this year, the PSE has proven itself resilient and capable of overcoming the political, social, and economic odds that are firmly stacked up against it. Thanks to improving liquidity levels, the fledgling stock market of Palestine is increasingly attracting Western and Gulf capital.”
