Encouraged by cease-fire, Palestinians plunge into stocks
The four-month cease-fire with Israel brings what appears to be a classic case of get-rich-quick fever
NABLUS, West Bank - Not long ago, Target Investment and Securities Co. was a lonely place. These days, the brokerage is standing room only as optimistic investors crowd into a smoky waiting room each morning to watch their shares climb to new heights.
The Palestinian stock market - minuscule by international standards - has been on a tear in recent months, boosted by encouraging earnings from some local companies, a four-month cease-fire with Israel and what appears to be a classic case of get-rich-quick fever.
The excitement is palpable in Nablus, a West Bank city better known as a stronghold of Palestinian militants fighting Israel. Residents eagerly exchange stockmarket cap of about 18 billion.
But Hasan Adnan Yassin, U.S.-educated general manager of the Nablus exchange, says the trends are all positive. The benchmark "al-Quds" (meaning Jerusalem) index has nearly tripled this year - to 721 from 277 - after a 54 percent gain in 2004. Trading volume during the daily two-hour session is nearly 8 million, up from 822,000 a year earlier.
The numbers are even stronger when compared to 2002, the height of Israeli-Palestinian fighting, when the index fell to 151 and the market canceled 100 trading sessions due to Israeli military closures, he said. The index was at 100 when the exchange opened in 1997.
Foreign investors, especially Palestinians abroad, have begun to pour into the market, Yassin said, boasting of the exchange's sophisticated electronic trading system and its alliance with global banking giant HSBC Holdings PLC, which Enabanawi, a 44-year-old housewife in Nablus, sold her jewelry six months ago for 3,000 shekels after hearing about the easy money to be made. Since then, she has lost 33 percent.
"I'm sorry that I got involved with something I don't understand," she said.