Global Turbulence Weighs Down GCC Markets, Falls 6.1% In May

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Global Turbulence Weighs Down GCC Markets, Falls 6.1% In May 07 - Jun - 2012

GCC markets were down in May, losing 6.1% after a decrease of 3.2% in April. Global factors weighed down on GCC with all the markets ending in Red. Dubai was the largest loser shedding 9.8% for the month, followed by Saudi Arabia which lost 7.7%. Saudi has been the best performing market YTD, with a gain of 8.7%. Kuwait lost 2.2% May cutting its yearly gain to 0.71%.

Market Indicators

Indicators

M. Cap (USD Bn)

Last  Close

Monthly Return %

YTD %

2011 %

P/E

TTM

Saudi (TASI)

365

6,975

-7.72

8.69

-3.07

12

Kuwait SE WT.INDEX

104

408

-2.15

0.71

-16.89

16

Qatar(Doha SM)

98

8,473

-2.65

-3.49

1.12

9

Abu Dhabi (ADI)

76

2,450

-2.16

1.98

-11.68

7

Dubai (DFMGI)

48

1,471

-9.83

8.66

-17.00

10

Bahrain (BAX)

17

1,137

-1.36

-0.58

-20.15

8

Oman(Muscat SM)

14

5,787

-1.40

1.61

-15.69

12

S&P GCC Composite Index

241

96

-6.14

4.28

-8.47

12

Source: Excerpt from Markaz ‘Daily Morning Brief’



News in the region included:
  • The IMF, after its latest assessment, projects Saudi Arabia to grow by 6% in 2012 with private sector increasing its role in the economy. IMF expects fiscal surplus at 17% of GDP and external surplus at 27% of GDP.
  • After last month’s decision by MSCI to reintroduce MSCI Saudi Arabia Domestic Indices and also make changes to MSCI GCC Countries & MSCI Arabian Markets Index, the index provided announced that the indices will be added on June 26, 2012.
  • IMF said GREs in the UAE have to repay USD 30bn of maturing loans this year and face a "significant" amount of debt falling due in 2014 & 2015.
  • S&P affirmed its 'AA/A-1+' long and short-term foreign and local currency ratings on Kuwait with Stable outlook. The ratings are supported by Kuwait’s rich resource endowment, and strong external & fiscal balance sheet positions while underdeveloped private sector and strong dependence on oil revenues constrained the ratings
  • Qatar has projected USD 49.2bn of spending in FY 2012/13, a rise of 28% over the previous year. Based on an average oil price of USD 65/bl, revenue is seen increasing 27%. The budget projects a surplus of 8% of GDP.
 
Volumes in the GCC decreased by 25% MoM while Value Traded decreased 38% over the month to USD 49bn. This was on the back of 22% MoM drop in volumes and 16% decrease in Value Traded in April. Saudi Arabia, which accounted for 88% of GCC’s total value traded, witnessed a 40% MoM drop in value traded.

Value & Volume Traded Indicators

 

 

 

 

Volume Parameters

Value Parameters

 

% of Volume Traded

% of Value Traded

 

Volume Traded (Mn)

LTM Avg Volume Traded (Mn)

 

Value Traded (USD Mn)

LTM Avg

Value Traded (USD Mn)

 

MoM Deviation (%)

MoM Deviation (%)

39%

88%

Saudi Arabia

8,347

6,470

-34%

43,402

38,029

-40%

42%

5%

Kuwait

8,847

5,335

1%

2,263

1,959

-19%

16%

3%

UAE

3,509

4,229

-41%

1,385

1,480

-40%

1%

4%

Qatar

303

181

15%

2,076

1,631

8%

1%

0%

Oman

228

230

-63%

187

182

-43%

0%

0%

Bahrain

63

46

164%

30

23

222%

 

 

Total GCC

21,297

16,492

-25%

49,343

43,303

-38%

 

Source: Markaz Research

 

                             

Global Markets review

Global markets were negative in May due to worsening conditions in the Euro Zone. The World broad index was down 8.7% as investors sold-off equities and flocked to safer assets. Europe, which is the epicenter of crisis, witnessed deep cuts with MSCI Europe losing 12.5% for the month. The flight to safety resulted in 10-year US Treasury yield hitting an all-time low of 1.642%.
 
CBOE VIX increased 41% during the month signaling heightened volatility. Commodities also suffered large losses with Crude oil shedding 13.6% due to concerns on demand slowdown and increasing inventories. ‘Safe haven’ gold too saw a cut of 6%. The winner clearly is the US dollar index which was up 5.4% in May.

Monthly Returns



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About Kuwait Financial Centre “Markaz”

Kuwait Financial Centre S.A.K. 'Markaz', established in 1974 with total assets under management of over KD 8 88 million as of March 31st, 2012, is the leading and award winning asset management and investment banking institution in the Arabian Gulf Region. Markaz is listed on the Kuwait Stock Exchange (KSE) since 1997 under ticker Markaz.