The best-performing stock market in the Arab world this year does not reside in a gleaming new skyscraper in Dubai or Abu Dhabi, and its success has little to do with the oil-fuelled boom sweeping much of the Gulf.

The Palestine Securities Exchange, based in the troubled West Bank city of Nablus, has shrugged off the continuing violence and instability in the Palestinian territories to outperform its regional rivals by a comfortable margin.