Palestine Stock Exchange in 2025.. A leap of 24% despite the Gaza war.. A small market that defied shocks and approaches pre-crisis levels
Strong recovery in indicators and liquidity
Khaberni - The Palestine Stock Exchange had a strong performance in 2025 compared to 2024, in a scenario that reflects a striking paradox between the real economy and the financial market, amid a 24% rise in the Jerusalem Index, which measures the performance of the most active 16 listed companies, in one of the strongest recovery waves since the war erupted in October 2023.
This performance was driven by a clear rebound in liquidity, as the value of trading jumped to about 383 million dollars last year, compared to 164 million dollars in 2024, indicating the return of investment activity and improved risk appetite, despite a complex economic and political environment.
Also, the market capitalization of the exchange increased by more than 862 million dollars to reach about 4.9 billion dollars at the end of last year, reflecting a growth of 21%, and placing the market again near the pre-war levels of about 5.05 billion dollars.
By the end of last year, the Palestine Stock Exchange included 48 listed companies spread across five main sectors, namely: the investment sector which grew by 38% in 2025, the services sector which climbed by 22%, the industry sector which rose by 11%, and the banking and financial services, and insurance sectors, which saw the least growth in 2025.
In contrast, a survey of listed stocks showed that 15 out of 48 companies recorded declines during the last year in their stock prices, reflecting ongoing pressures on some companies, especially in the insurance and investment sectors.
Strong regional performance
One of the most notable indications of improved confidence is the rise in the share of foreign investment to about 38% of the total market during the past year, compared to 34% in the period before the war, indicating a gradual return of capital, especially from expatriate Palestinians.
The market also witnessed the execution of 4 new subscriptions totaling nearly 51.7 million dollars, reflecting the market's continued ability to attract financing, even in an unstable environment.
In comparison with the closing of Arab stock exchanges in 2024, the Palestine Stock Exchange, despite being more than two years into the war, outperformed several regional markets, including Abu Dhabi which registered a growth of about 11.19%, Dubai at 17.22%, and even Kuwait which achieved gains of 19.8%. This performance places the Palestine Stock Exchange in the middle of the Arab market ranking, ahead of most Gulf markets, though below the top-performing markets like Egypt and Jordan.
For instance, Egypt's EGX30 index jumped by about 41.58% during the past year, benefiting from asset re-pricing, and the decline in currency value that enhanced the attractiveness of stocks, along with a partial return of local and institutional liquidity.
The main market index in Amman recorded one of the strongest performances in the region, with an increase reaching 45%, indicating improved investor confidence and business environment stability, and the significant improvement in one of the key stocks, the Arab Bank.
Invitation to invest
Data from the Central Bank of Jordan and the Palestinian Monetary Authority show that 5 Jordanian banks have branches in the Palestinian market, out of a total of 13 local and incoming banks operating in the Palestinian market, with total assets of 9 billion US dollars for the five banks until the end of the third quarter of 2025 compared with about 6 billion dollars before the war..
Meanwhile, the total assets of the Palestinian banking sector by the end of the period amounted to nearly 26.3 billion dollars, meaning that the share of Jordanian banks from the total assets is 34.2% according to the data of the Palestinian Monetary Authority.
Meanwhile, the net profit of the five banks in the first nine months of the past year neared 81 million dollars, out of the total banking sector profits during the period amounting to 147 million US dollars according to official data.
These figures represent a model of the returns on foreign investments in one of the pillars of the Palestinian economy, while other sectors at the Palestine Stock Exchange achieved high growth rates exceeding the growth achieved in the banking sector, such as the investment sector for example.
Experience in a challenging environment
In a highly complex economic environment, the companies listed on the Palestine Stock Exchange continue to play a pivotal role that goes beyond being profit entities, to become one of the pillars of economic resilience. These companies, active in the banking, services, investment, and industry sectors, have demonstrated a relative ability to continue operating despite operational restrictions and decreased demand in some sectors.
Despite pressures imposed by the political reality, many of these companies have managed to maintain acceptable operating levels, and even achieve growth in some cases, reflecting the flexibility of business models and their ability to adapt.
Furthermore, the continued disclosure and governance compliance by these companies boost investor confidence and affirm that the Palestinian market, although small, possesses an institutional structure capable of resilience.
In this context, investing in the Palestin
