Factors That Will Improve Expected Results for Companies Listed on the Palestine Stock Exchange

It is expected that the listed companies will start disclosing their preliminary financial results for the year 2025 in the coming days, which are anticipated to be positive for many of them for various reasons, including, for example, the variable exchange rate of the dollar against the shekel that we will focus on in this report. 

The exchange rate decreased by 7% in 2025 compared to 2024, with the average exchange rate during 2025 being approximately 3.45 compared to 3.69 for 2024. This decrease will support the achievement of positive results for many companies listed on the Palestine Stock Exchange, especially in the industrial sector, where purchasing costs are expected to decline significantly as a result of importing raw materials in US dollars and selling their products in the local market in Israeli shekels. The profit margins in the industrial sector will also notably improve as a result of the increased profit margin for products.

Another sector that will benefit from the drop in the dollar exchange rate against the shekel is the telecommunications sector, primarily represented by the Palestinian Telecommunications Group and the Palestinian National Mobile Communications Company "Ooredoo." A significant portion of the revenues is in Israeli shekels, and when preparing the financial statements in dinars for the Palestinian Telecommunications Group or in dollars for Ooredoo, the revenues will show a good improvement. The same applies to the insurance sector, which generates a substantial part of its revenues in Israeli shekels.

Another variable that will play a positive role in the expected results for 2025 is the interest rates, which are expected to decline, thus reducing financing costs, especially for companies with high indebtedness ratios, particularly Palestine Development and Investment Company "PADICO," as well as the Arab Palestinian Investment Company "APIC," where financing costs are expected to decrease significantly in the coming periods, leading to an improvement in their profitability and an increase in their fair values. 

Finally, we expect the dollar exchange rate against the shekel to continue to decline during 2026, which will improve the expected results for companies in 2026. We also expect the continued reduction of interest rates on the major borrowed currencies, which will lower financing costs and increase companies' profitability.