Conclusion of the Fourth Annual Palestinian Capital Market Forum
The Palestine Exchange (http://www.pex.ps) concluded its Fourth Annual Palestinian Capital Market Forum which was held in Ramallah on the West Bank last week with a host of recommendations designed to enhance the good achievements of the Exchange to date and help it attract more investors, through improving communications function of listed companies with the wider investor community both locally and abroad. The conference was opened by a key note speech by Prime Minister Dr. Salam Fayyad, who gave unequivocal support to private sector investments and the role the Palestine Exchange is playing as a vehicle for investors to trade in and raise capital. The Prime Minister pledged to work with the Exchange to enhance the investment environment in Palestine to keep the Palestinian market attractive to foreign investments both in the capital markets and private equity. The Prime Minister promised to work harder to reduce dependency on Donor aid, by virtue of reducing budget expenses and increasing investments he stated that to achieve this, the country needs a working Exchange and a modern capital markets regime.
The Forum concluded its deliberations by recommending a host of policy and practical steps designed to enhance the level of governance, disclosure and reporting at the Exchange by listed companies.
Reading the Forum's recommendations, Mr. Ahmad Aweidah, CEO of the Palestine Exchange, reiterated the importance of Investor Relations in the Palestinian financial market. He added that "Investors and the professional investment community are becoming more sophisticated and expect to receive constant information and updates from the companies and in real time to make correct investment decisions." He also said "that listed companies need to communicate real information and as candidly and transparently as possible especially at times of crisis in order to allow investors and analysts to get a fair assessment of the company's value. It is a constant flow of information, so the function of Investor Relations is a key one to help investors better grasp any information even if it is negative. The onus is communicating and doing it within the parameters of best practice," added Mr. Aweidah.
The Forum ended its deliberations with a host of recommendations aimed at boosting the value and proposition of investors relations in Palestine. Principles of these recommendations were: importance of establishing professional Investor Relations Departments at all listed companies; a step that would ensure constant flow of information, and additional adherence to disclosure and transparency. The recommendations also stressed the importance of capacity building for the IR personnel to remain at par with international best practice with a focus on coordination among these professionals to help lay ground work for effective transfer of information. An Arabic language booklet on the principles of IR was recommended to serve as an information tool kit to help lay the ground work for this function. Governance and disclosures were encouraged to grow in weight in order to help listed companies communicate effectively in good times and bad times with the entire stakeholder environment from the investors, to analysts and fund managers. The Forum also encouraged listed companies to communicate with transparency at times of crisis, projecting the future outlook and having crisis management plans in their IR functions as a cushioning strategy.
The Palestine Exchange was encouraged to follow up on these recommendations, and to act as a constant source of information and guidance on the subject matter of Investor Relations as an entity that has imbedded in the past the importance of governance, disclosure and reporting in a bid to help the companies become more plugged in the investors scene, more transparent; supporting their ability to have proper valuation of their stock and financial performance. Road Shows and communication via financial media was equally encouraged as an important tool to keep telling the story of the exchange and the listed companies in a bid to attract new investors and dispel any misperceptions or false information.