A Red October


The GCC markets continue to show poor performance compared to emerging market peers and are only slightly outperforming developed markets on a YTD basis. MSCI GCC lost 2.75% in October after gaining 6% in September bringing the YTD gain to 24%. All GCC markets were down except for Dubai’s DFM which saw a modest return of 0.30%. The worst performer was Kuwait’s Weighted Index, which shed 7% in October, pulling the YTD gain down to nearly 4%.

GCC Volume was up 21% for the month at 26.8 bn while Value was gained 54% to USD 46.5 bn.

The Saudi Arabian inflation figures picked up a bit in September where inflation (CPI) growth was at 4.4%.

GCC Markets Review

Global Markets review

The prevailing hope was that the S&P 500 would score its 9th consecutive month of gains in October; however, sharp selling in the final days of the month caused the index to post a monthly loss of 2%. Consumer confidence in the U.S. remains at an exceedingly low 47.7 (by way of comparison, the same indicator was at 84.9 in the post-9/11 recession), indicating that despite various economist’s claims that the recession is over, the “average Joe” isn’t buying it.

The Case Shiller Housing Index posted its third consecutive monthly gain while the US Homebuilders Housing Market Index lost 5% in October. The US CPI numbers eased in September, showing a decline of 1.25% versus the 1.52% decline in August. On the emerging market front, Chinese exports were down 15% YoY in September 2009, a deceleration of the 23% declines seen in July and August.

YTD Market Cap Weighted returns of MSCI World Constituents

On a peak to trough basis, the Saudi index saw the most decimation, losing 80% of its value; the current run up of the index (trough to current value) is at 52% (Figure 3). The largest run up has been in EM, up 101% after losing 66% peak to trough. The least amount of recovery thus far has been in the Kuwait, which is up 15% from its trough value, after losing 59%. Source: MSCI, Thomson DataStream

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Kuwait Financial Centre S.A.K. "Markaz", with total assets under management of over KD 950 million (USD 3.3Billion) as of September 30, 2009, 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.