VZCZCXYZ0031
OO RUEHWEB

DE RUEHJM #2443 1651426
ZNR UUUUU ZZH
O 141426Z JUN 06
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2787
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS JERUSALEM 002443 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA FOR FRONT OFFICE; NEA/IPA FOR 
WILLIAMS/GREENE/WATERS/WAECHTER; NSC FOR 
ABRAMS/DORAN/LOGERFO; TREASURY FOR NUGENT/ADKINS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV PREL KWBG
SUBJECT: WHERE IS THE BOTTOM? PALESTINIAN STOCK MARKET 
CONTINUES TO PLUMMET 
 
REF: JERUSALEM 2059 
 
¶1.  (SBU) Palestinian stock prices continued to fall, with 
the Al-Quds Index losing 4.57 percent in the week ending June 
8 and closing at 540.69.  The Average Daily Trading Volume 
(ADTV) reached USD 2.89 million compared to USD 4.01 million 
four weeks ago.  Lotos Investment analyst Waleed Makkieh told 
EconOff that the Palestinian Stock Exchange (PSE) had 
continued its descent June 13, as a result of the violent 
clashes between Fatah and Hamas June 12 and June 13.  He said 
that many investors were "averaging" their portfolios and 
waiting for stock prices to reach bottom in order to buy 
stocks at the lower prices and "average out" their original 
purchase of stocks at higher prices only a few months ago. 
 
¶2.  (SBU) Makkieh said Paltel had taken a heavy hit reaching 
4.33 Jordanian Dinars (JD) (USD 6.11) June 13 down from a 
52-week high of 16.40 JD (USD 23.15).  Paltel stock began to 
tumble after the Palestinian Legislative Council (PLC) 
elections in January and continued to fall after the 
formation of the Hamas-led government. 
 
¶3.  (SBU) International investors had informed Makkieh that 
they were liquidating their position in the PSE only 
temporarily and would use their resources to invest in other 
timely opportunities.  Makkieh added that they did not feel 
their return was evenly matched to the risk from political 
instability in the West Bank and Gaza.  However, in the week 
of June 11, some large institutional investors had been 
buying heavily in the PSE and planned to hold long-term 
positions. 
 
¶4.  (SBU) Makkieh commented that some investors were deterred 
from investing in the PSE because the markets were shallow 
and prevented investors from easily liquidating their 
positions.  He said it could take at least a week for some 
investors to sell their stocks.  Makkieh predicted that the 
market has not yet hit bottom, but will continue to fall as 
the political and security situation in the West Bank and 
Gaza worsens. 
WALLES