Palestinian Bourse to Sell Stake This Year, CEO Says

By Tal Barak

Aug. 18 (Bloomberg) -- The Palestine Securities Exchange, where 37 companies from the West Bank and Gaza Strip trade, plans to sell shares to the public by the end of the year, the bourse's Chief Executive Officer Ahmad Aweidah said.

The PSE, whose listed companies have a market value of $3.1 billion, will sell a stake of at least 25 percent, Aweidah said in a telephone interview from the bourse's headquarters in the West Bank city of Nablus. The 11-year-old exchange, founded by the Palestinian Authority and Palestine Development and Investment Co., also expects three new listings by the end of 2008 and may consider a merger in the future, he said.

The share sale will come after the bourse's benchmark Al- Quds Index outperformed 86 of 88 equity gauges tracked by Bloomberg in 2008 with a 28 percent gain and the average value of shares changing hands doubled from last year to $6.4 million. That's still 98 percent less than in Dubai, while trading on the London Stock Exchange is more than 3,000 times that of the PSE.

``We want to send the message across of credibility and transparency,'' said Aweidah, 37. ``We want to institute a culture of taking companies public and what better way to set the example than do it ourselves.''

Global Alliances

Dubai Financial Market PJSC is currently the only publicly traded bourse in the Middle East, having listed its shares in March 2007. Jordan's Amman Stock Exchange and Oman's Muscat Securities Market have also said they may sell stock to attract international investors.

Stock exchanges worldwide have announced more than $65 billion of purchases and ventures since 2005 amid pressure from investors to form alliances. The world's biggest exchanges, CME Group Inc., Deutsche Boerse AG and NYSE Euronext, all sold shares and became publicly listed in the last decade, in part to seek funding to make acquisitions.

Aweidah, born in Jerusalem, was appointed CEO of the Palestine bourse two months ago, after spending three years as head of the fixed-line unit of Palestine Telecommunications Co., the largest phone company in the Palestinian territories. He replaced Hasan Abu-Libdeh, who is currently the special adviser on economic affairs to the Palestinian Authority Prime Minister Salam Fayyad.

Abu-Libdeh said in May 2007 that the Palestinian exchange ``must'' go public by the end of that year to revive interest in the bourse after the Al-Quds Index lost more than half its value since January 2006. The sale was delayed as the exchange waited for government approval for the public offering, Aweidah said.

`Under the Mud'

The Al-Quds Index has since rallied as Palestine Development and Investment, the holding company known as Padico, and Palestine Telecommunications, known as Paltel, advanced. Both are based in Nablus.

Padico, which controls Paltel and also owns 65 percent of the exchange, added 9.9 percent this year. Paltel, whose shares also trade in Abu Dhabi, gained 45 percent. The company this month reported a 36 percent increase in second-quarter profit as it added subscribers.

``There's a lot of gold under the mud,'' said Aweidah. ``Palestinian companies have a solid track record of working through very difficult political and economic conditions.''

To contact the reporter on this story: Tal Barak in Tel Aviv at tbarak@bloomberg.net.