Investing is a prominent component in a sound financial literacy programme, helping individuals to grow their savings and sustain their income. A well-regulated exchange is a cornerstone for a well-functioning capital market; it was and will always be the primary gateway for investing in local economies. Exchanges have to play a pivotal role in protecting investors not only through regulation, but also via offering investor education, as a tool to complement regulations.
Investor education programmes vary between exchanges, but objectives never change. Palestine Exchange (PEX) an emerging market with exceptional conditions, was always at the forefront of regional markets in this aspect by institutionalising its investor education efforts, in 2006, and considering it an integral part of its work strategy.
Ahmad Aweidah, CEO of Palestine Exchange, sheds light on the role of PEX in investor education and other activities.
What is investor education from PEX perspective?
Investor education is simply deepening knowledge via understanding the fundamentals of investing. The concept of the stock market in Palestine is new due to the relative newness of the exchange; therefore, the concept of investing in securities is new. Investor education provides a degree of awareness among different societal segments, including students, households, employees, and others.
What are the objectives of the investor education programme?
Our investor education programme aims to protect investors by educating them on their rights and responsibilities, and by being able to evaluate a variety of financial products and make informed decisions. It aims to increase financial inclusion in securities via expanding the outreach of financial services and products and reduce investors’ vulnerability to fraudulent schemes via dealing with authorised parties.
On the media side of the programme, we aim to enhance the Exchange’s image and increase confidence in its practices. We also aim to enhance the presence of the Exchange in the media locally and internationally, disseminate PEX data and maintain a distinguished level of communication with local and external bodies, while also attracting diaspora Palestinians and foreign institutional investors.
What are the barriers that deter individuals from participating in the financial market?
It differs based on many factors including the level of education and level of income, the development of the local economy and availability of investment opportunities. In Palestine, the first barrier is the low level of financial awareness, which needs a national strategy to face it. Other barriers include unfamiliarity with the financial system, lack of trust in the financial system due to storytelling by ex-dealers and behavioural patterns backed by religious beliefs.
What makes PEX intensify investor education activities?
Before we launched our investor education programme back in 2006, PEX witnessed some fluctuations during the exchange trajectory, led mainly by the absence of investment awareness among local investors, herd theories and the drift of people caused by unrealistic news that ultimately resulted in the loss of many investors. Financial losses resulted and later we felt the indirect impact through weakened market confidence.
Thereafter, we launched our investor education programme and used a variety of tools to enhance investor literacy locally, via leveraging investment awareness among individuals, and provided them with knowledge and data to enable them take the well-informed investment decision. We collaborated with many educational institutions including universities and high schools to spread investment awareness among students, as they are investors of tomorrow.
What tools does PEX use in reaching its investor education programme goals?
PEX seeks constantly to develop tools to reach investors in various segments of society. Here are some of the tools we use:
- Educational seminars, workshops and training courses.
- School and university visits to the Exchange.
- Strengthen the relationship with the academic community through various activities such as the school day, the trading simulation programme, the Investor Research Contest, and others.
- Regarding social responsibility, we launched multiple programmes such as the University Scholarships Financial Market Fund, and the Master's Thesis Scholarship Programme.
- Media tools, such as radio and television.
- The Exchange website, which contains easily accessible access.
- Production of audio-visual materials.
- Social media sites, which we widely use to educate the public.
- Awareness booklets and flyers.
- Brochures on various topics.
- Write articles.
What is the impact of Covid-19 on PEX investor education programme?
There is no doubt that the Covid-19 global pandemic, which has cast its shadow over various global economic sectors and greatly affected different aspects of life, has had a significant impact on the investor education activities at PEX. This has caused us, in line with the social distancing guidelines, to develop our communication channels via social media platforms and other technological means to continue to educate local society.