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PSE has a clear Vision & Mission

PSEVISION

To create a model for Arab and regional financial markets, through:• providing innovative services,• proposing ideal investment opportunities in securities,• attracting investments,• the use of state of the art technology, • compliance to the rules of corporate governance , and• establishing constructive relations with Arab, regional and global

markets.

To provide a fair, transparent and efficient market for tradingsecurities that:• serves investors, • protects their interests, • contributes in creating an enabling environment that attracts local and

foreign investments,• interacts with local and Arab relevant institutions, in a manner that

serves the national economy and enhances the culture of investment in financial markets.

PSEMISSION

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The PSE has been trading since 1997

1995 Palestine Development and Investment Company (PADICO) and Palestine National Authority sign an agreement for operating the securities exchange

1997 First trading session held

2009 A well established exchange with turnover in 2009 of US$ 500 million and a market capitalization of $ 2.37 billion

2010 Public Shareholding Company

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39 companies are listed on the PSE

SectorNo. of

companies

Market Capitalization (US$)

(as of 31 December 2009)

Banking 7 601,381,086

Insurance 5 91,712,716

Investment 8 426,815,786

Industry 10 179,229,307

Services 9 1,076,227,636

TOTAL Market CAP as of 31 Dec.2009

2,375,366,531

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New capital raised by shares

Initial Public Offerings (value of money raised at first listing):

2008(US$)

2009(US$)

12,738,436 45,471,808

Secondary public offerings (new capital raised for companies already traded):

2008(US$)

2009(US$)

15,508,692 10,869,054

Expected listing for 2010

CompanyNo. of Shares to

be listedValue (USD)

Al-Wataniah Towers Co. 10 million shares 10,000,000

The Ramallah Summer Resorts Co. 1.625 million shares 2,298,444

Palestine Insurance Co. 5 million shares 5,000,000

Dar-Al-Shifa Company for Manufacturing of Pharmaceuticals (Pharmacare)

5 million shares 7,721,135

Wataniya Mobile 170 million shares 170.000.000

Arab Palestinian Investment Company (APIC) 70 million shares 70,000,000

Club Palestino of Chile 1.5 million shares 1,500,000

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Ownership Profile

Regulatory Framework

• PCMA was established in 2005

• Securities Law No. (12) of the year 2004

• Companies Law No. (12) of the year 1964

• PSE regulations: Trading, Listing, Disclosure, Dispute

settlement, Code of Corporate Governance

• Applicable regulations at the PSE are compatible with

best international practices

• Seeking WFE membership8

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Trading @ the PSE

System: Horizon, NASDAQ OMX

E-Trading since 2007 (one of the first in the

Arab World)

Fully automated trading, clearing, and

settlement system

Surveillance @ the PSE

SMARTS

Best of breed application

Adopted by the PSE and the Palestinian Capital Market

Authority

Monitors the trading session instantly to detect any

unusual behaviors of prices or trading volumes

Any violation is subject to the adopted penalties and

fines.10

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Foreign investment

Friendly and encouraging legal and regulatory

environment vis-à-vis foreign investment in the stock

exchange.

No capital gain taxes and no income tax on the

revenues generated out of trading.

The only determinant for foreign investments is the

preferences of listed companies for foreign ownership

of shares in their capital.

Custodian: HSBC

PSE Daily turn oversince inception

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Composition of the Al-Quds Index

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Sector Listed Company Symbol

Weight of index(as of

28/2/2010)

BankingArab Islamic Bank AIB 2.31%

Alrafah Microfinance Bank AMB 1.07%Bank of Palestine BOP 18.12%

IndustrialBirzeit Pharmaceuticals BPC 3.55%

Golden Wheat Mills GMC 0.74%Insurance Ahliea Insurance Group AIG 1.21%

Investment

Palestine Development and Investment

PADICO15.91%

Palestine Industrial Investment PIIC 0.93%Union Construction and Investment UCI 1.31%

Services

Palestine Telecommunications PALTEL 51.36%Palestine Electric PEC 3.23

Palestine for Distribution & logistics Services

WASSEL

0.25

Turn Over ratios for 2009

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Sector Listed Companies

(included in Al-Quds index)Turn Over Ratio 2009

Daily Average Turn Over Value US$

2009

BankingArab Islamic Bank 51.04 112,686Alrafah Microfinance Bank 37.95 36,134Bank of Palestine 34.51 485,603

IndustrialBirzeit Pharmaceuticals 17.71 56.587Golden Wheat Mills 47.34 46,503Jerusalem Cigarette 12.23 21,734

Insurance Ahliea Insurance Group 11.95 16.963

Investment

Palestine Development and Investment 25.03

352,902

Palestine Real Estate Investment 37.95 101,267Union Construction and Investment 12.04

13,525

Services Palestine Telecommunications 14.91 738,366Palestine Electric 7.20 16,204

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Client typeNo. of

Shareholders% No. of Shares % value $ %

Retail investors 73,644.00 98.90 421,002,645.00 38.90 873,135,386.30 36.80

Institutions 492.00 0.66 216,021,982.00 19.96 583,104,782.52 24.58

Related Party 325.00 0.44 410,844,000.00 37.96 815,693,533.42 34.38

Government 3.00 0.004 34,339,990.00 3.17 100,478,325.03 4.24

TOTAL 74,464.00 100 1,082,208,617.00 100 2,372,412,027.27 100

Breakdown between: Retail Investors and Institutions

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Ownership structure of listed companies by nationality

NationalityNo. of

shareholders% No. of shares % value $ %

Locals 70,959 95.29% 595,346,296 55.01% 1,243,738,366 52.43%

Arabs 2,260 3.04% 222,534,317 20.56% 372,919,426 15.72%

Gulf 221 0.30% 77,365,747 7.15% 177,588,737 7.49%

Western 304 0.41% 80,470,442 7.44% 213,740,664 9.01%

Others 720 0.97% 106,491,815 9.84% 364,424,834 15.36%

TOTAL 74,464 100% 1,082,208,617 100% 2,372,412,027 100%

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More positive intervention will lead for better economic growth and stability

Steady GDP/GNI with growing inward flows and consumption

2005 2006 2007 2008

GDP (current US$ millions) 4,559 4,322 4,536 4,639

GNI per capita, (current us$) 1,519 1,489 1,494 --

Current transfers, non-residents (net, $m) 1,128 1,278 2,093 3,169

Final consumption ($m) 5,609 5,772 6,086 --

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Comparison of trading activity (2009 with 2008)

No. of Trading Sessions

Volume Value)$( No. of Trans.

Daily average turnover

value)$(

Market Capitalization

)$(

Al-Quds index

2008 244 339,168,807 1,185,204,211 152,319 4,857,394 2,123,057,098 441.66

2009 246 238,877,373 500,393,398 88,838 2,034,120 2,375,366,531 493.00

Change % %0.8 -29.57% -57.78% %-41.68 %-58.12 %11.88 %11.62

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PSE in comparison with other regional exchanges

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PSE recovers from the impact of the current global crisis with good

performance

In 2009, MENA markets

de-coupled then re-coupled, but

not entirely!

In 2009, MENA markets

de-coupled then re-coupled, but

not entirely!

PSE stands in the mid between regional markets

PSE stands in the mid between regional markets

Stock Index variationDecember 2009 with December 2008

Exchange %

TUNIS STOCK EXCHANGE 48.50%

EGYPT CAPITAL MARKET 34.73%

BEIRUT STOCK EXCHANGE 32.96%

MUSCAT SECURITIES MARKET 17.05%

ABU DHABI SECURITIES MARKET 14.79%

PALESTINE SECURITIES EXCHANGEPALESTINE SECURITIES EXCHANGE 11.62%DUBAI FINANCIAL MARKET 10.22%

DOHA SECURITIES MARKET 1.06%

CASABLANCA STOCK EXCHANGE -4.92%

AMMAN STOCK EXCHANGE -8.15%

KUWAIT STOCK MARKET -9.99%

BAHRAIN STOCK EXCHANGE -19.17%

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The Palestinian stock market recovery is relatively steady

Daily closing of Al-Quds Index during 2010

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ALL FIGURES IN US$ 2005 2006 2007 2008 2009

Gross revenues 11,781,308 5,349,393 5,065,587 5,538,083 4,011,669

Operating costs 1,310,383 1,717,946 2,287,317 2,812,733 2,614,154Net income (AFTER TAX) 8,730,923 3,033,225 2,312,722 2,157,011 46,247

Equity 6,889,163 9,922,388 14,325,617 12,617,858 11,671,610

  2005 2006 2007 2008 2009Non-Current Assets 448,018 2,888,075 7,660,691 10,987,507 10,661,382

Current Assets 8,742,576 9,044,258 7,412,174 3,634,334 1,832,241Total Assets 9,190,594 11,932,333 15,072,865 14,621,841 12,493,623

     

Equity and Liabilities 2005 2006 2007 2008 2009Total Equity 6,889,163 9,922,388 14,325,617 12,617,858 11,671,610Non-Current

Liabilities 317,656 202,740 273,911 347,439 441,071

Current Liabilities 1,983,775 1,807,205 473,337 1,656,544 380,943

Total Liabilites 2,301,431 2,009,945 747,248 2,003,983 822,013Total Equity and

Liabilities 9,190,594 11,932,333 15,072,865 14,621,841 12,493,623

PSE : A Functioning Profitable Business

Why invest in the PSE?

Small, yet robust and growing fast

Great spring back potential

Efficient structure & operations within best international practice

Regulated market within international standards

PSE: Tried & “TESTED”

Undervalued stocks

Listed companies: consistent good financial performance

Strong reliable infrastructure and banking sector

Strong donor support in state building 24

Thank You

www.p-s-e.com

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