Continued market weakness in June

15/07/2010

GCC markets continued to follow global cues in June, losing 1% versus a drop of 11% in May. All GCC markets saw another month of declines, except Qatar which gained 1.68%; losses were led by a 7.45% decline on the DFM (Dubai). Saudi saw the least decline, 0.44%, as three Blue Chips saw substantial monthly gains thereby mitigating the effect of Sabic and Al Rajhi Bank’s losses.  

Crude oil gained 2% after tumbling 15% in May. Investors booked profits ahead of Q2 corporate earnings announcements.

Liquidity was down across the GCC in June, as volume and value traded declined 11% and 24%, respectively. In terms of volume, all markets ex. Bahrain saw declines, the highest being a 42% decline in Qatar. In terms of value traded, UAE and Qatar led the way with declines of 30% each. Volatility was down in all markets, with Qatar MVX declining 47%, the least decline among GCC markets was 15% in Dubai. Pan-GCC MVX doubled in Q2 led by substantial increases in April and May.

GCC Markets Review

World markets remained in the red as continued economic uncertainty in Europe, a slowing recovery in the US and troubles in China weighed on world markets. MSCI World lost 3% in June after tumbling 10% in May, taking the YTD loss to 9%. On a market cap weighted basis, the US was the largest contributor with a loss of 2.8%.

Monthly returns remained negative across the board led by Shanghai’s loss of 8% for June; the market is down 25% for the year. India managed a gain of 4% for the month. The CBOE VIX index, as a result of the volatility of market returns, was up another 8% in June after spiking 45% in May.

###
About Markaz

Kuwait Financial Centre ‘Markaz’, with total assets under management of over KD921 million as of March 31, 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.