Palestine Stock Exchange Officially Launches Total Return Index to Enhance Investment Decisions

SadaNews - The Palestine Stock Exchange has launched the Total Return Index (TRI) in a strategic step aimed at aligning with international standards adopted in the world's leading stock exchanges. This index provides a new tool that helps investors make informed and accurate financial decisions based on the financial returns achieved over specified periods.

The Total Return Index is considered a qualitative addition to the Palestinian financial sector, as it provides a comprehensive view of investment in the Palestinian market, including changes in stock prices, dividends, and their reinvestment. It reflects the true value of returns in the long term and allows investors to have an accurate view of their investment performance.

Moreover, the index enhances transparency in evaluating investment performance and allows for comparisons of the stock exchange's performance with regional and global markets that follow the same methodology, creating a clear picture that the Palestinian market is stable and generates real returns, reflecting the market's strength and resilience in facing challenges.

The General Manager of the Palestine Stock Exchange, Nihad Kamal, emphasized the importance of the Total Return Index, noting that since its establishment, the Palestine Stock Exchange relied on other indicators to measure returns on investment, including price returns or dividends and the market capitalization of listed stocks. What distinguishes the Total Return Index is that it combines these indicators simultaneously.

He added that the Palestine Stock Exchange is among the distinguished markets in providing returns compared to regional and global markets, reaching over 9% in some periods. This index also provides the Palestine Stock Exchange with a formula to promote investment in Palestine and invites both foreign and local investors to take advantage of existing opportunities to achieve investment returns that cannot be attained in other markets.

In comparison between the price index and the total return index, the price index (Price Index) is limited to tracking changes in stock prices only and is used to measure daily market movements, while the total return index (TRI) excels by measuring the complete performance of investment by combining price changes with distributed profits and their reinvestment, making it a more accurate tool for investors seeking to assess actual returns and make informed financial decisions.

This launch falls within the efforts of the Palestine Stock Exchange to enhance tools for measuring financial performance, elevate levels of transparency and efficiency in the market, and link it to international standards, thereby contributing to attracting both local and regional investors.