GCC Markets end down on Egypt Turmoil

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GCC Markets end down on Egypt Turmoil 07 - Feb - 2011

GCC markets were mostly down in January; due to profit taking ahead of earnings in addition to a wave of selling as political turmoil erupted in Egypt. S&P GCC lost 2.6% for the month; led by 5% and 4% losses in the UAE and Saudi Arabia, respectively.

Investor’s turned attention to Egypt as protests erupted over the last week of January; the Egyptian market shed close to 20% before being closed, while S&P, Fitch and Moody all downgraded Egypt credit and placed it on Negative outlook. Kuwait, Saudi and UAE markets, which all have close ties to Egyptian, saw their stocks fall in the final week of the month while CDS rates spiked briefly.

 

Liquidity was up in January; with GCC Volume and Value Traded up 35% and 20%, respectively. Total value traded in the GCC amounted to USD 30 bn for the month. Qatar was the only market which saw a monthly decline in volume and value traded, down 26% and 8%, respectively.

After hitting a 5 year low at the end of December; GCC volatility surged over 5 times in January. MVX GCC quadrupled in just the last three days of January as turmoil in Egypt intensified. The same held Saudi Arabia and Kuwait; both of which hit a 5 year low in January 2011 before surging multiple times in the final days of the month. MVX Saudi closed out the first week of January with a new low before quadrupling in the last three days of the month. Likewise, MVX Kuwait reached a 5 year low in the third week of January before nearly tripling by month end.

GCC Markets Review

Market Indicators

M. Cap (USD Bn)

Last

Monthly

2010

P/E

 

Close

%

%

TTM

Saudi (TASI)

340

6358

-3.97

8.15

14

Kuwait SE WT.INDEX

124

481

-0.67

25.00

20

Qatar(Doha SM)

91

8745

0.73

24.50

12

Abu Dhabi (ADI)^

74

2587

-4.89

-1.51

9

Dubai (DFMGI)

51

1534

-5.90

-10.08

11

Bahrain (BAX)

17

1449

1.16

-2.11

12

Oman(Muscat SM)

15

6839

1.24

5.92

13

S&P GCC Composite Index

241

98

-2.63

12.70

14

Source: Excerpt from Markaz ‘Daily Morning Brief’ February 1st, 2011


Global Markets review

World markets were led by Developed world gains as economic growth continued steadily while possibility of monetary tightening in Emerging Markets resulted in sluggish performance. Crude oil gained another 7% in January, ending at $99.46/bbl, as political turmoil in Egypt spooked markets.

Monthly returns were positive for the Developed World while negative on the Emerging Market side as signs of monetary tightening emerged. MSCI Europe was up 3.7% while the Indian market was the worst performer, losing 10.6%.
 
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About Kuwait Financial Centre “Markaz”

Kuwait Financial Centre 'Markaz', with total assets under management of over KD1.03 billion as of September 30, 2010, was established in 1974 has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997