GCC MARKET WEEKLY UPDATE November 28, 2008
GCC markets recorded another week of negative performance as the dramatic fall in crude prices coupled with the worsening of the financial turmoil in November 2008 further dented investor confidence in the region. GCC stock markets lost around $127 Bn in November, after posting a similar performance in October, wherein they lost $220 Bn. Tadawul All Share Index (TASI) posted its third consecutive weekly loss in November. The index fell 9.4% and closed at 4424 points. At the beginning of the week, the Saudi Arabian Monetary Agency decided to lower the repo rate to 3% and reduce the mandatory reserve requirements of banks to 7%. The agency expects increased credit availability to provide some momentum to the markets. However, this early momentum could not be sustained as shares plunged again toward the end of the week due to concerns over oil prices and uncertainty regarding the global economic situation weighed heavily on investor sentiments. The UAE markets also reported a weak performance this week on account of heavy selling pressure. Dubai Financial Market (DFM) lost 4.1% during the week and closed at 1929 points as foreign investors had a net sell position of AED72.1 Mn, while institutional activity on the bourse reported a net sell position of AED100.6 Mn. Stock markets in Abu Dhabi also declined by 4.0% and closed at 2721 points. The energy sector declined 13.3%, and banking and financial services sector fell 6.7%; both sectors led the losses on the exchange. Kuwait’s stock markets also posted a marginal decline of 1.7% during the week with the index closing at 8728 points. The Banking index was a stark contrast compared to other sectoral indices as it posted weekly gains of 5.1%. However, the markets were led into negative territory as other sectoral indices posted marginal losses during the week. The political uncertainty in Kuwait due to the resignation of the government also added to the negative sentiments. Muscat Securities Market (MSM) posted a marginal decline of 1.5% during the week following a flat performance in the previous week. The decline in the MSM was led by a fall in the Banking and Investment (3.8%), and Industrial (2.2%) indices. Qatar’s Doha Securities Market (DSM) also posted a marginal fall of 1.5% during the week led by a significant 5.5% decline in the Industrial index. The markets witnessed heavy downfall during the first two days of the week and gained momentum in the latter part of the week. Around 5.3% foreign institutions indulged in buying during this week compared to 10.1% in the previous week. Bahraini stock markets also posted a significant decrease of 6.2% led by the 11.3% and 5.2% fall in the Investment and Industrial indices, respectively. Overall, GCC markets exhibited a mixed trend during the week with most markets reversing the trend witnessed in the early part of the week. The DFM continued to be the worst performer. It has registered a loss of 67.5% since the beginning of 2008.
GCC MARKET WEEKLY UPDATE November 28, 2008
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