Millions of Dollars in Losses.. "SadaNews" Reveals Shocking Figures for Traders from Palestine in the Forex Market

Exclusive to SadaNews: Sources familiar with the matter confirmed to "SadaNews" that the Palestinian market has lost millions of dollars in recent times due to investments in the Forex market.

The sources stated that the rush of some citizens towards seeking quick profits amidst the difficult economic conditions in Palestine pushed them to invest in the Forex market, either through licensed companies or via the black market, which effectively led to millions of dollars leaking from the local market to abroad.

Official figures obtained by "SadaNews" from the Capital Market Authority revealed that the volume of deposits in the Forex market through the four licensed companies has reached (35,041,708) dollars since the official trading began in February 2024 until mid-February of the last month.

While the total client losses reached (12,935,280) dollars, representing (37%) of the deposit volume. The total client profits during this period amounted to (1,745,574) dollars, which is only (5%) of the total deposits.

When comparing total profit to total loss, it constitutes only 14%, while the loss percentage is about 84%, meaning that for every 14 dollars entering Palestine from this market as profit, there are 86 dollars in losses, indicating that the loss amount is six times the profits. If comparing total profit with total loss during this period, the values of what the Palestinian market has lost reach (11,189,706) dollars.

If we compare the recorded losses for traders during this period with the capital of the four companies providing services (23,078,095) dollars, it amounts to about 48% of the value of these companies' capital, indicating that if these losses continue at the same rates recorded during speculation in the upcoming period, the Palestinian market will lose an equivalent of the combined capital of these companies within less than four years of the trading start in these companies, but traders are naturally the ones who pay the price.

In response to a question posed by "SadaNews" to the Capital Market Authority regarding whether the investment portfolios of traders pay taxes, the authority indicated that value-added tax is exempt since the foreign supplier providing services to Palestinian companies is not within the local tax framework, as the licensed Palestinian companies provide financial brokerage services and not physical supplies, but this does not apply to income tax for Palestinian companies.

It is noted that these official figures only include what is traded through licensed financial brokerage firms overseen by the Capital Market Authority, which total four companies: the United Securities Company, Windsor Walker Palestine Ltd, CFI Palestine, and the United Global Securities Company, meaning that the volume of trading done in the black market through unlicensed companies may be many times higher than these figures, given the difficulty of controlling this market.

In a comment on the performance of the official Forex market in Palestine, an economic expert told "SadaNews": 95% of clients trading in these markets lose their money for various reasons related to lack of knowledge, insufficient experience, management costs, and lack of economic viability for these companies (in all countries of the world) regardless of the justifications since they benefit parties other than the ones depositing the funds," noting that all global studies confirm that speculation in these markets is akin to a gambling table, thriving more during times of crises and recessions.

The expert clarified that loss figures would be greater than what is officially announced if what is termed "unrealized losses" is calculated, which are losses that occurred but the financial positions have not been closed to deduct them; the value of the available balances currently after deducting the value of losses and withdrawals from the deposit volume determines the true financial status of the market.

The Chairman of the Board of Directors of the Capital Market Authority, Ammar Al-Akr, confirmed during a meeting with economic journalists the existence of pages and centers promoting themselves as providing financial consulting services and holding specialized courses in this regard, but in reality, they practice financial brokerage operations on behalf of investors in the Forex market without official oversight, pointing out that this issue is being followed by official authorities, and several suspects have been referred for conducting illegal activities to the judiciary.

The Capital Market Authority announced earlier this year that the total money entering trading via licensed Forex companies in Palestine amounted to about 25.2 million dollars last year. The net total remaining in the trading phase is about 9.7 million dollars by the end of this year. An economic expert commented that this means a loss of money (between losses and withdrawals) exceeding (16) million dollars in one year without these investments leaving any impact on economic development.

Experts confirm that Forex market makers worldwide, including banks, brokers, and traders, along with operating costs, generate profits reaching about (50) billion dollars daily from their investments in the global foreign exchange market.

Experts consider the Forex market to be high-risk and not money-generating; thus, any profit at any entity's end comes at the expense of losses for another entity.

Murad Jadba, General Director of the Securities Department at the Capital Market Authority, previously confirmed to "SadaNews" that the authority has approved licensing three companies in recent years to operate in currency trading (Forex) in line with its commitment to regulate the market, and recently a fourth company was licensed.

Jadba stated: "There are several reasons behind the authority's decision to grant licenses to companies to operate in Forex after years of reservation, noting that combating the black market and protecting investors' funds and confronting fraud operations are at the forefront of those reasons.

"SadaNews" addressed in a report titled "Forex Market.. Whales in the Market Swallow Small Fish," highlighting the risks of investing in this market, mentioning the importance of resorting to trading through companies licensed by official authorities if an individual decides to invest in it, as they are subject to the oversight of the Capital Market Authority, which sets various conditions and regulations to protect traders. However, the report revealed that large investors in these markets profit at the expense of small investors, who comprise the majority of traders.

Estimates show that global market makers earn profits amounting to (70) billion dollars daily, while losses will undoubtedly be borne by some traders, whose numbers reach nearly (15) million traders on any given day.

It is worth noting that the Forex market (Foreign Exchange - FX) is the decentralized global market for trading currencies, where foreign currencies are bought and sold via computer networks (OTC) without a centralized exchange. It is considered the largest and most liquid financial market in the world, with an average daily trading volume of over 7.5 trillion dollars, operating 24 hours a day for five days a week.