The Palestine Exchange (PEX) is preparing for a public listing on the stock market it operates, as part of plans that could see four flotations on the bourse in the next 12 months.
The flotation will occur through the sale of shares held by Palestine Development & Investment Company (Padico), which owns about 80 per cent of the PEX. The market value of the exchange is $60m at the end of 2011.
“We have notified the Capital Markets Authority (CMA) and have begun the process for the initial public offering [IPO] in a modified procedure to take into account that it is the exchange. So we are amending some of the criteria and procedures to ensure there is no conflict of interest,” says Ahmad Aweidah, chief executive officer of PEX.
Padico accounts for 8.98 per cent of PEX’s market capitalisation as of 31 December 2011.
On 9 January, the PEX adjusted the list of companies on the benchmark Al-Quds Index, from 12 companies to 15, to reflect the increase in the number of listed companies.
Last year, seven new companies were listed on the PEX, bringing the total up to 46 and raising the market capitalisation of the bourse by $400m to $2.8bn. None of the new listings were IPOs apart from telecoms firm Wataniya. The others were shareholding companies that listed on the exhcange, but did not sell shares to the public. “According to the capital markets and securities law every shareholder company has to be listed, which is why we had a very big influx [last year],” says Aweidah.
Other than the expected PEX IPO and the second stage of the Wataniya offering, Aweidah is expecting two more IPOs this year. Wataniya will issue 15 per cent of its shares, in accordance with the capital markets law, which states each company has to float at least 25 per cent of its shares.
The Arab Palestinian Investment Company (Apic), which has a paid up capital of $100m, is also expected to float during 2012, having delayed it since 2010 due to the poor liquidity of the PEX and the effects of the Arab uprisings last year.