UAE And Saudi Arabia Lead GCC Gains

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Markaz Research

UAE And Saudi Arabia Lead GCC Gains 13 - Feb - 2012

The GCC extended gains in January, up 1.6% following a 2.55% gain in December; positive performance was again boosted by Saudi Arabia, which was up 3.25%. The UAE also saw a positive month with the DFM surging 6% while Abu Dhabi was up 2.15%. Qatar and Oman posted the largest declines, losing about 2.4% each for the month.

Market Indicators

Indicators

M. Cap (USD Bn)

Last  Close

Monthly Return %

2011

2010 %

P/E

TTM

Saudi (TASI)

336

6,386

5.13

-3.07

8

12

Kuwait SE WT.INDEX

107

406

-1.80

-16.89

26

14

Qatar(Doha SM)

97

8,779

2.17

1.12

25

11

Abu Dhabi (ADI)

71

2,402

-1.74

-11.68

-1

7

Dubai (DFMGI)

47

1,353

-1.85

-17.00

-10

9

Bahrain (BAX)

17

1,144

-1.67

-20.15

-2

8

Oman(Muscat SM)

14

5,704

5.07

-15.69

6

12

S&P GCC Composite Index

231

92

2.55

-8.47

13

12

Source: Excerpt from Markaz ‘Daily Morning Brief’



News in the region included:

  • The IMF is seeking up to $600bn from GCC states as part of a $1trillion funding need as the European crisis worsens. The IMF hopes to secure $500bn from Saudi Arabia, who has stated that it is willing to contribute, provided it is afforded increased say in the running of the so-called European bail-out fund.
  • The IMF has called on GCC states to enact more coordinated fiscal policies in order to better integrate the economies, citing high inflation differentials between countries as a key issue which requires addressing.
  • Saudi Arabia will begin allowing foreign firms to list on the Tadawul as the country makes an effort to open up the market and boost liquidity though some foreign investors have expressed concern over possible “strings” attached in the form of excessive regulation on foreign funds such as mandatory lock-up periods.
  • Lending growth in Kuwait was at its lowest level in 17 years, according to Central Bank data; credit to residents grew at a flat rate of 0.8%, the lowest rate since 1995.
  • Qatar is planning to spend upwards of $25bn through 2020 on expanding its petrochemical sector in an effort to double its annual production capacity from 9.2mn tons to 23mn tons.
 
Liquidity expanded in the first month of the year; GCC value and volume traded increased 23% and 49%, respectively, with trading valued at $46bn. Trading was led by Saudi Arabia and Kuwait where value traded was up 31% each, while volume in Kuwait nearly doubled.

Value & Volume Traded Indicators

 

 

 

Volume Parameters

Value Parameters

% of Volume Traded

% of Value Traded

 

Volume Traded (Mn)

LTM Avg Volume Traded (Mn)

 

Top 5 Volume Traded Concentration in Market Cap

Value Traded (USD Mn)

LTM Avg

Value Traded (USD Mn)

 

Top 5 Value Traded Concentration in Market Cap

MoM Deviation (%)

MoM Deviation (%)

45%

90%

Saudi Arabia

7,489

4,352

44%

3%

41,436

25,876

31%

25%

38%

5%

Kuwait

6,299

3,221

90%

1%

2,176

1,745

31%

16%

15%

2%

UAE

2,538

3,392

47%

6%

937

1,281

5%

22%

1%

3%

Qatar

141

180

-66%

12%

1,390

1,761

-56%

46%

1%

0%

Oman

240

182

-5%

22%

177

190

-25%

41%

0%

0%

Bahrain

18

40

-48%

32%

10

20

-67%

34%

 

 

Total GCC

16,725

11,366

49%

 

46,126

30,872

23%

 

Source: Markaz Research


Risk in the GCC (as measured by the Markaz Volatility Index – MVX) was up 67% in January led by MVX Qatar which was up 88%. Oman and Bahrain were the only markets to see declines in risk, down 33% and 40%, respectively.

Global Markets review

World markets began in the green due to positive signs from the US economy and optimistic signals out of Europe. Crude oil saw a gain of 3.35% to $110.98/bbl while the CRB Commodity Index was up 3.52%. CBOE Vix shed 17% while the Ted Spread was down 35%.

The World broad index was up 5% for January mainly on strength from Emerging Markets which were up over 11%. The lowest gain was seen in Frontier Markets which were up half a percent and the FTSE 100 which gained 2%.
 

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 865 million as of December 31st, 2011, 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.