GCC losses expand in August

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Markaz Research

GCC losses expand in August 06 - Sep - 2011

GCC markets tumbled on global cues during the month; S&P GCC lost 5.12% as Saudi tumbled 6.46% for the month. Kuwait’s weighted index followed with a loss of 3.4%. All markets were in the red; the least decline was a 0.67% loss on the Abu Dhabi exchange which is the best performing GCC index for the year thus far.

 

 

Market Indicators

 

M. Cap (USD Bn)

Last

Monthly

YTD

2010

P/E

Indicators

Close

%

 

   %

TTM

Saudi (TASI)

317

5,979

-6.46

-9.69

8.15

12

Kuwait SE WT.INDEX

108

402

-3.39

-17.07

25.00

14

Qatar(Doha SM)

92

8,290

-1.34

-4.51

24.50

11

Abu Dhabi (ADI)^

76

2,602

-0.67

-4.33

-1.51

8

Dubai (DFMGI)

50

1,475

-2.84

-9.57

-10.08

8

Bahrain (BAX)

18

1,261

-2.37

-11.96

-2.11

9

Oman(Muscat SM)

13

5,703

-1.82

-15.58

5.92

11

S&P GCC Composite Index

221

89

-5.12

-11.54

12.70

12

 

 

Source: Excerpt from Markaz ‘Daily Morning Brief’

                 


News in the region included:

·         Saudi inflation was up to 4.9% in July (the largest monthly jump since 2008), although a moderate increase from the 4.7% registered in the previous month; inflation is being closely monitored given large scale funding and social welfare programs enacted during the year.

 

·         According to a statement by the State’s ruler, misuse of Kuwait's state budget surplus, including unproductive spending, has led to structural imbalances in the economy. The state posted a budget surplus of USD 19.4 bn in the 2010/11 fiscal year, a decline of 38%.

 

·         The Qatar central bank cut interest rates to 4.5% to further boost loans growth; total lending was up 14% YoY in July boosted by the trade and real estate sectors.  

 

Liquidity was down again in August; GCC value traded declined 15% to USD 17.76 bn while volume was down 6% to just 6.65 bn. Saudi and Kuwait saw value traded decline by 21% and 14%, respectively. GCC Value Traded in the YTD period is at USD 232 bn.

Data Table: Value & Volume Traded Indicators

 

 

 

Volume Parameters

Value Parameters

% of Volume Traded

% of Value Traded

 

Volume Traded (Mn)

LTM Avg Volume Traded (Mn)

MoM

Top 5 Volume Traded Concentration in Market Cap

Value Traded (USD Mn)

LTM Avg

Value Traded (USD Mn)

MoM

Top 5 Value Traded Concentration in Market Cap

Deviation (%)

Deviation (%)

34%

79%

Saudi Arabia

2,234

3,384

-14%

28%

13,976

20,068

-21%

30%

23%

6%

Kuwait

1,542

3,744

-14%

1%

991

2,384

-14%

37%

38%

6%

UAE

2,529

4,088

3%

8%

1,064

1,687

16%

25%

2%

9%

Qatar

133

188

71%

25%

1,552

1,885

76%

47%

2%

1%

Oman

165

215

75%

25%

166

252

81%

42%

1%

0%

Bahrain

46

42

41%

30%

14

20

19%

37%

 

 

Total GCC

6,648

11,661

-6%

 

17,762

26,296

-15%

 

Source: Markaz Research



Risk in the GCC (as measured by the Markaz Volatility Index – MVX) was up just 28% in August after expanding 1% in July. The highest jump was in MVX Qatar, which doubled, while MVX Kuwait was down 16%.

Global Markets review

Monthly returns were highly negative across the board; the worst performance came from MSCI Europe, tumbling 10.4% for the month. Shanghai and Frontier Markets saw the least losses, shedding 5% and 5.2%, respectively, during August.

Monthly Returns

World markets tumbled under pressure from continued economic issues in the US in addition to the impact of the 5th August S&P downgrade of US credit. Mid-month saw Fitch affirm the US rating while awarding it a ‘Stable’ outlook versus ‘Negative’ calls from S&P and Moody’s. Also during the month, Moody’s downgraded Japan’s government debt by one-notch to Aa3, with a ‘Stable’ outlook, due to a build-up of debt since the 2009 recession.

Signs of flagging US demand and progress in Libya brought crude oil prices down 2% in August with a YTD gain of 24%. Conversely, the uncertainty has been a boon for Gold; the precious metal saw its highest monthly gain in 21-months, up 13% in August to close at $1,826/oz.

The broad World index tumbled by 7.3% in August bringing the YTD loss to 4%.

# End #

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