GCC markets turned positive in July as corporate earnings lifted sentiment in addition to positive reports from rating agencies. GCC markets gained 5% for the month, bringing the YTD gain to 4%. The MSCI GCC index underperformed emerging markets and BRIC for the month but is outperforming the indices on a yearly basis. All GCC markets saw gains, except Bahrain which shed 0.17%. Gains were led by Kuwait’s Weighted Index which was up 5.5% for the month.
As for corporate earnings, Gulf Bank swung to a profit of KD 2 mn after posting losses in the same period of the previous year. NBK posted a 10% growth in second quarter earnings and provisions of USD 81 mn for the same period. In the UAE, NBAD and First Gulf Bank saw 1H10 earnings growths of 21% and 12%, respectively, while Emirates NBD saw earnings decline 29% in the same period. While in Saudi Arabia, Blue Chips gained despite poor results; Al Rajhi Bank and Samba Financial Group gained 6% and 5%, respectively, despite 1H10 earnings declines of 1% and 3%, respectively.
Liquidity continued to dry up across the GCC in July, as volume and value traded declined a further 5% and 27%, respectively during July. In terms of volume, all markets saw declines, except Kuwait where volume traded was up 70% for the month, value traded in Kuwait was up 23% to USD 2.46 bn. Volatility in the GCC was down 40% in July, led by the UAE markets where MVX Abu Dhabi and MVX Dubai declined 48% and 39%, respectively.
GCC Markets Review
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World markets saw gains in July as positive economic signals emerged from Developed Europe. MSCI World gained 8% in July after losing 3% in June, bringing the YTD loss to 2%. Monthly returns were positive for the month, led by MSCI Europe’s gain of 12% followed by Shanghai, up 10% for the month. The FTSE was up 7% as the UK reported strong 2Q GDP growth.
Source: MSCI, Thomson DataStream
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.