Flexibility of the Palestinian Stock Exchange in Dealing with Crises

SadaNews Economy - Since its establishment in 1997, the Palestinian Stock Exchange has faced numerous crises, starting with the second Intifada, many political crises, the COVID-19 pandemic, and the recent war on the Gaza Strip.

However, the most notable factor, as published by Dr. Samah Al-Attout, is that the Palestinian Stock Exchange has demonstrated a rapid recovery. Historically, if we look at all the wars and crises inflicted upon the Palestinian people, starting from the 2008 war, we see that the stock exchange's performance was positive by 1.98%, while during the 2014 war that lasted 50 days, the performance was positive by 3.19%.

If we observe the stock prices prior to October 7, 2023, and compare them to today’s prices, it becomes evident that all stocks are now recording good increases compared to before the crisis, with most stocks returning to their prices before the crisis.

Pharmaceutical companies such as Jerusalem Pharmaceuticals and Bezeet Pharmaceutical Industries have managed to achieve remarkable results and good profit growth, reflecting positively on their stock prices with increases of no less than 10-20%.

Similarly, for most companies, for instance, in the last session before October 7, the share of Palestine Development and Investment Company "PADICO" traded at $1.40, while today it is trading at nearly $2, representing a 30% increase.

The same goes for Arkan Real Estate Company, which traded at $1.90, whereas today it trades at $2.24, marking an 18% increase.

Moreover, most leading stocks have managed to maintain their performance, which is attributed to the management expertise shaping the companies’ boards and their flexibility in dealing with crises, along with the companies’ ability to achieve sustainable profits.

After reviewing all leading companies, we find that the exception to what we mentioned is the banking sector. Although it recorded excellent profits in 2025, the determining factor that attracts investors is the cash distributions. If the banks' boards of directors in their upcoming meetings decide to distribute cash or in-kind profits at good rates to shareholders, the stock prices of banks will rise significantly, especially since the stock prices of banks are trading below their fair values based on financial analysis models.

Upon scrutinizing the financial data of the banking sector, we find that the ratio of loans to deposits is good and secure, less than 70%. Furthermore, the capital adequacy ratios in the banking sector are excellent, nearing 15%, which surpasses the requirements of the Monetary Authority and Basel standards.

In conclusion, we see that the flexibility enjoyed by the Palestinian Stock Exchange will help it navigate the recent crisis in the Middle East safely due to the strong performance of the listed companies.