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The volatility levels declined across the board during the month of September 2007 with GCC clocking the lowest volatility since the beginning of our measurement period (2004). In relative terms, emerging markets continue to top the volatility chart followed by S&P 500. The decline in volatility levels has positively impacted the returns. Both Emerging market and GCC increased by 11% and 4% respectively. Among GCC markets, Dubai clocks as the most volatility market while Bahrain takes the honor of being the least volatile market. According to the report, after posting an all time high in the month of August, the volatility levels in Emerging markets and S&P 500 witnessed a decline by 32% and 30% respectively during September 2007. Incidentally, due to the inverse relation between risk and return the stock market returns also improved during September 2007 by 11% for Emerging markets and 4% for S&P 500. The decline in Saudi Arabia volatility was at 2% in September, which is far less than the 35% decline in August. In August the Saudi Arabian index posted a return of 9%, however, in the month of September the Saudi Arabian index posted a negative return of 5%. Kuwait on the other hand, was the least volatile market in August, however, in the month of September, the significant decline in Bahrain volatility, had resulted in Kuwait volatility moving to the second place. Kuwait volatility witnessed a decline of 8% during September, while the Kuwait Price Index provided a return of 1.3%. Both the markets in UAE – Dubai and Abu Dhabi witnessed a reduction in volatility levels. Even though, the volatility levels in Dubai continue to be at the highest in the GCC region, the Dubai volatility posted a 53% decline in September. Abu Dhabi on the other hand posted a 37% decline in volatility levels. As at the end of September, Bahrain is one of the least volatile markets. The Bahrain volatility level declined significantly by 54% during September 2007. The markets moved positively as compared to August. Qatar and Oman were the two markets which witnessed an increase in volatility levels in the month of September. The 61% increase in Qatar volatility is the single highest spike in the Year to Date (YTD) period. It is significant to note that Qatar is the best performing market during September with returns of 8%. Oman also witnessed an increase in volatility by 20%, while its market return improved by 5%. The volatility index launched by Kuwait Financial Center (Markaz) is a new innovative index to measure stock market volatility in the emerging market and GCC region. The index is code named MVX and has a base date of 1st January 2004. Markaz has developed a proprietary model to construct and maintain the index. The model considers many statistical properties of the underlying GCC stock markets in order to calculate the volatility index. ### About Markaz Kuwait Financial Centre 'Markaz', with total assets under management of over KD 1.40 billion as of June 30, 2007, 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; and was recently awarded a BBB+ corporate rating by Capital Intelligence Ltd.