Palestinian stock exchange: ‘We never closed'
Yes, Palestine has a stock exchange. And the remarkable thing is that it has stayed open consistently since its launch in February 1997. It’s not the biggest bourse in the world – 38 stocks and a market capitalization of $3.1 billion – but it lodged a claim to fame by being the world’s best-performing stock market in 2005, returning 306%. Up 30.8% in the first six months of 2008, it’s one of the world’s best performers.
The numbers are partly explained by the complete absence of other effective ways of getting any exposure to the handful of success stories on the West Bank. "At the time [2005’s record year], the stock exchange was the only opportunity for investors to invest in Palestine," says national economy minister Kamal Hassouneh. "It is virtual not physical, there is an exit strategy, it’s liquid. It was the only window."
Foreigners are permitted to invest in the market without restriction, and some do: Kuwait’s Global Investment House has a mutual fund devoted entirely to the Palestinian Territories. The Palestine Dedicated Fund was up 18% in the first six months of the year. "The current environment continues to be supportive of further price appreciation," says Tala Samhouri, head of Mena asset management at Global. "The first quarter of 2008 earnings have been extremely impressive, with aggregate growth of 85% year on year."