The Israel Defense Forces' Operation Cast Lead in the Gaza Strip led to a weekly drop of about 8% in the indices of the Palestinian Securities Exchange (PSE), which concluded its trading year on Tuesday.
The al-Quds Index tumbled by 38 points on Tuesday compared to the last trading day of the previous week, before the fighting in Gaza began, reaching 441.66 points.
On the week's last trading day (the PSE was closed on Wednesday due to the New Year holiday), the index lost 16.46 points (about 3.6%). Some $3 million were traded on the market Tuesday.
The shares of leading companies were the ones to suffer the sharpest losses, which led to the drop in the index's value. The Paltel telecommunications company, for example, lost some 4.8%, while the Padico investment company dropped 4.7%.
The Nablus market dealers attributed the week's losses to the security situation, claiming that the events in Gaza created tension and economic ambiguity in the West Bank as well.
This was quite a blow as far as the dealers were concerned, as the negative trend came at the end of a month during which dealers in the Palestinian market were becoming slightly optimistic.
The al-Quds Index concluded the week before the start of the Israeli operation with a fine rise of 15.6 points (about 3.4%). A relatively high average of $4.6 million was traded on the market that week, more than twice the sum traded the week before.
In spite of last week's losses, in general December was a successful month for the Palestinian capital market. The stock exchange index at the end of December was 4.28% higher than at the end of November.
The past month's gains were mainly the result of the 2.1% rise in the banking sector and the 11.8% increase in the services – two significant market sectors.
A total of 6,300 deals were executed in the PSE in December, and some $37 million were traded on the market that month. The companies' value on the market at the end of December 2008 totaled about $2.1 billion – a 4.8% rise compared to the market value at the end of November 2008.
Dr. Gil Feiler is founder and managing director of Info-Prod Research (Middle East) Ltd. , and Doron Peskin is head of research