The Nablus-based Palestine Exchange (PEX) announced on Monday that it would be partnering with Nasdaq and use the New York-based technology stock exchange’s market-transaction services.
“NASDAQ’s new trading platform can take up to 100,000 processing orders per millisecond, and of course, our old system was not able to cater to that,” Ahmad Aweidah, CEO of the PEX, told The Jerusalem Post.
“[Nasdaq’s technology] opens up avenues for the Palestine Exchange to develop new products and new trading mechanisms into the market...it will enhance our product development capacity as an exchange,” he said.
Founded in 1995, with its first trading session in 1997, the PEX will continue to use Nasdaq’s SMARTS surveillance technology for monitoring the market.
“We look forward to partnering with PEX as they continue to transform their market and evolve as an important regional player in the Middle East,” said James Martin, Nasdaq’s regional manager on market technology for Europe, the Middle East and Africa.
The Palestine Exchange has a market capitalization of $3.9 billion with 48 listings, primarily in banking, financial services and insurance.
Brokers and investors trade shares and bonds in the Jordanian dinar and the American dollar, despite the Israeli shekel being used as legal tender in the West Bank.
The PEX is also considered to be a smaller “frontier market,” unlike the Tel Aviv Stock Exchange, which is classified as a “developed market,” having been upgraded from emerging- market status in 2010 by the MSCI index.
When asked about possible ties between the Nablus and Tel Aviv exchanges, Aweidah didn’t hesitate before responding: “No, there are no possibilities of any cooperation with the Tel Aviv exchange as long as the political situation is the way it is at the moment.”
Aweidah mentioned “occupation and uncertainty for business” and added, “We don’t really need them for anything. They don’t have anything to offer PEX.”
He added that the exchange typically looks to Jordan or other Arab countries for partnerships. Most of the foreign investors on the exchange are Jordanian.
“The Tel Aviv exchange actually has been suffering for the past few years,” Aweidah said. “Lots of Israeli companies, particularly in biotech or hi-tech, are choosing to de-list and go to London and NASDAQ directly or to hold their IPOs there.”
Because the PEX is a frontier market, it does not have to worry very much about multi-billion dollar companies choosing to de-list. The exchange is entirely owned by private investors.
Nasdaq’s infrastructure technologies include systems are installed in more than 100 financial institutions across the world. The technology exchange is home to around 3,900 listings with a market value of approximately $12 trillion.