GCC market cap falls to $758bn

GCC stock markets had a turbulent performance during the month of May 2011, and ended on a lower note, barring the Saudi market which had marginal gains.

In the absence of new drives, regional bourses had no choice but to follow the international markets, which declined on renewed debt woes concerning Greece, Kuwait’s Global Investment House said in its monthly report.

Among GCC bourses, Oman’s MSM 30 index posted the steepest decline down by 5 17 per cent for the month.

During May 2011, the market’s benchmark index closed below the important physiological level of 6,000 points for the first time since December 2009, as stock prices of the market’s heavy-weight tumble across the board, as they scrummed to selling pressure. However, it managed to inch up to end the month at 6,007.89 point.

The Kuwaiti market also performed poorly in May, posting a 5.12 per cent drop as measured by Global General Index

(GGI), which is a market cap weighted index. Escalated political tension, poor Q1 2011 corporate results, and the suspension of several companies which failed to disclose their financials by the deadline set by the exchange, were all culprits behind the market’s retreat.

Trading activity remained around the same level of the previous month. GCC bourses saw 15.86 billion shares being traded in May, as compared to 15.82 billion shares traded in the previous month (+0.25 per cent).

Aggregate value of shares traded on the respective bourses reached $39.47 billion (Dh145 billion) in May 2011, as compared to $37.54bn (+5.14 per cent) reported in the previous month.

The breadth of GCC stock markets tilted towards decliners in May 2011, as the share price of 317 stocks retreated compared to 207 advancers, out of 561 traded stocks.

Market capitalization of the GCC markets combined stood at $758.50bn, down by $14.95bn during the month. (adjusted for cross-listed companies).

Elsewhere in the Mena region, Amman stock Exchange followed the same negative trend, as the GCC stock markets, with Amman Free Float Index retreating by 1.74 per cent by the end of the month. Similarly, Tunis Bourse ended on a lower note, with TUNINDEX posting a 2.98 per cent in monthly loss.

Meanwhile, the Egyptian market, as measured by EGX30 soared by 10.39 per cent by the end of May 2011.

During the month, Egypt's economy has received a much-needed boost with the promise of aid and loans from the international community. The World Bank has pledged that it will support Egypt with $4.5bn in the next 24 months.

Meanwhile, the United States pledged to assist the Egyptian economy with $2bn, in addition to a $4bn grant from Saudi Arabia and a $10bn of Qatari investments geared towards the battered Egyptian economy.

Saudi

The Saudi market had a rocky performance during the month of May 2011; nonetheless it managed to post marginal monthly gains, and was the only GCC bourse to end the month on a positive note.

Tadawul All Share index ended at 6,735.98 points, up by 0.38 per cent in May. Sectoral performance was mostly positive, with 13 out of the 15 sectors of the market ending the on a higher note. However, both heavy-weight Petrochemical Industries and Banking indices performed poorly and ended down by 1.66 per cent and 2.49 per cent, respectively.

On the positive side, Cement index soared by 13.54 per cent. News showed that the country’s cement sector recorded a remarkable sales growth in April 2011, due to increased developmental plans in Mecca, Madina and Jeddah.

Moreover, private projects, especially those for housing and schools, boosted demand for basic materials. In March 2011, King Abdullah ordered authorities to build 500,000 low-cost houses in different parts of the kingdom and allocated SAR250bn to implement the project.

All cement companies had a positive performance during the current month, led by AL Jouf Cement Company, with its share price appreciating by 40.64 per cent, reaching SAR17.65.

Elsewhere, Multi-Investment stocks also had a stellar performance, with the sector’s index adding 11.33 per cent in monthly gains. Saudi Arabia Refineries Company (SARCO) topped this month’s gainers list, up by 56.91 per cent, as it ended at SAR52.25.

SARCO’s case to redeem 770,880 shares of the capital increase of Saudi Industrial Investment Company (SIIG) with all rights in earnings and dividend will be reviewed by the Board of Grievance on June 20, 2011.

Trading activity increased, with 6.22bn shares traded, at an aggregate value of SAR126.44bn, up by 24.20 per cent and 12.77 per cent, respectively compared to the previous month. 

Qatar

Qatari market slumped during May, taking its cue from weakness in global stocks, as doubts about Europe's ability to manage its debt hammered developed markets. This came despite that investors, especially foreigners, are expecting an upgrade by MSCI Index next month.

Amid shrinking trading activity, Global Qatari General Index slipped by 1.18 per cent on M-o-M, closing at 632.70 points, while QE index plunged 2.03 per cent finishing at 8,375.19 points. The sectors performance was mixed this month as the indices of Industrial and services sectors declined by 4.96 per cent and 0.46 per cent, respectively, while those for Banking & Finance and Insurance increased by 0.10 per cent and 0.08 per cent, respectively. Industries Qatar share price dipped by 5.63 per cent, pulling the industrial index lower, tracking declines in oil prices that was affected mainly by the recovery of the US Dollar against the Euro.

Industries Qatar share price reached QAR139.0 by the end of the month.

On the other side, the biggest lender, Qatar National Bank, bucked the trend and rose by 1.10 per cent, closing at QAR138.0, after completing subscription on a rights issue and funds rushed back in. Within the same sector, Al Rayan Bank accounted for the highest activity of 23.23 per cent and 13.69 per cent, respectively, of the total volume and value of shares traded on QE this month. The scrip fell by 0.13 per cent, closing at QAR23.05.

Aamal Holding Company topped the gainers list for the month, adding 26.19 per cent to its value, after announcing that it will raise its free-float to around 24 per cent by offering global depositary receipts in London 

UAE

UAE markets witnessed a bearish trend in the month of May driven by external and macro level factors. The inclusion of UAE markets in MSCI emerging market took the lime light during the month and expected to continue for the next month till the review ends. However, concerns that UAE may not be upgraded due to delay in implementing new payment settlement system, Delivery Versus Payment (DvP), which is a prerequisite for MSCI, negatively affected the markets.

Also, doubts about Europe's ability to manage its debt hammered markets, fall in Euro, lower May. Abu Dhabi General Index reported 2.09 per cent drop. While Dubai General Index was massively hit losing 4.54 per cent from its value to close at 1,559.92 points.

Tamweel, listed in DFM, grabbed investors’ eyes during the month as it resumed trading after almost two years of suspension when it returned back to profitability in 1Q2011.

The scrip was heavily traded leading volume leaders’ list as investors money were stuck in the stock during the suspension period. Tamweel ended the month with 4.04 per cent loss to close at Dh0.95.

UAE markets were very quiet in May and monthly trading activity slumped. This sluggish performance was mainly due to catalysts, summer vacations getting investors from the market, which were more in a wait and see mode.

Total volume reached 4.68bn (-32.48 per cent) with total value amounting to Dh5.92bn (-35 93 per cent). However sentiments were lifted by real estate firm Eshraq's oversubscribed IPO. Eshraq raised Dh825m, its target amount, before IPO closed . It was a sign that the market is ripe now for further IPOs.

Eshraq announced that it may be listed in Abu Dhabi Securities Exchange within 2 months.

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