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Regional equity markets

An overview of December’s stock market trends throughout the Arab world

by Executive Editors

Beirut SE  (One month)

Current year high: 1,200.49    Current year low: 705.56

During the buildup towards end of year revelry, excitement in Lebanon was largely reserved for street life and hospitality businesses. The Dubai World shock had an impact on the Beirut Stock Exchange but only by a dent of 2.5%, minor when compared with Gulf markets. Overall, the BSE was in tune with developing market trends in the Nov 18 to Dec 17 review period and the MSCI Lebanon index closed at 1,106.70 points on Dec 17, 3% lower from the start of the period. Trading volumes on the BSE contracted in December and the index moved sideways with a minimal downward bias in the second and third weeks of the month as investors were not seen to make major moves. Stocks of Lebanon’s major banks ended the review period in positive territory. The two share classes of real estate company Solidere closed near $24.50 on Dec 17, down about 5% from Nov 18 but up more than 45% when compared with the start of 2009.

Amman SE  (One month)

Current year high: 2,569.53    Current year low: 2,968.77

The general index of the Amman Stock Exchange closed at 2,598.23 points on December 17, representing a gain of merely half a percent from Nov 18. Sector indices showed insurance and industrial ending the review period better than the general index; the insurance sub-index climbed from Dec 8 and closed the Dec 17 session more than 9 percentage points above the general index. The industrial index had a low point on Dec 1 but closed the Dec 17 session 3.3% higher over the start of the review period. In the banking sector, the Dubai World experience stirred up concerns which affected Arab Bank with a 6.4% share price drop on Dec 2 but reassurances over the bank’s limited exposure to Dubai’s financing problems helped the ASE’s market cap leader. Arab Bank ended the review period 0.4% lower. Market volatility on the ASE was moderate at 13%.

Abu Dhabi SM  (One month)

Current year high: 3,239.74    Current year low: 2,136.64

The Abu Dhabi Securities Exchange had no place to hide and initially nowhere to go but down after the Dubai World bombshell. From Nov 25 to Dec 9, the ADX general index lost 15% before restoration of some optimism lifted the index to a close of 2,774.27 points on Dec 17, moderating the drop to 5.95% when compared with Nov 18. The insurance index was the only ADX sub-index to barely budge during the entire period and even achieve a modest gain. All other sectors were dragged lower; real estate and construction suffered the most and ended the period 11.3% and 17% down. Losers, representing all sectors, outnumbered gainers by a wide margin. Volatility exceeded 56%. National Bank of Fujairah was the best-performing stock, up 19.6% while Arkan Building Materials dropped the most, down 27.5%.

Dubai FM  (One month)

Current year high: 2,373.37    Current year low: 1,433.14

The graph of the Dubai Financial Market’s general index for the Nov 18 to Dec 17 period looks like a gorge from the fantasy movie Van Helsing, with a cut so steep and deep that V-shaped is an inadequate descriptor. The operative number for the period is 75% volatility and despite massive rebounds of key stocks after Dec 9, only a handful of listed companies actually passed through the horrific period without exuding unnecessary pain. By Dec 17, the sector index losses had moderated to the mid teens and the DFM index closed 12.48% down when compared with Nov 18. Dec 17 sickbay of stocks more than 15% lower than a month earlier included Arabtec Holding and Emirates NBD. Emaar Properties was a case study in partial share price recovery under direct impact of Dubai World while Air Arabia was an example for a scrip with intense trade volumes and volatility outside of the properties and developers loop.  

Kuwait SE  (One month)

Current year high: 8,438.80    Current year low: 6,391.50

The Kuwait Stock Exchange’s benchmark general index had one of its better phases for 2009 in the 30-day period from November 18, closing the period at 7104.30 on Dec 17 with a gain that was half a percentage point shy of 6%. The food, investments, and services sub-indices were the visible outperformers when compared with the general index while the industrial index, which showed the strongest dip south of all sectors in early December, regained its footing to close the period with a black zero. Volatility was notable but not excessive, at 16.8%. The vast majority of stocks ended the period higher. Among them, market cap leader Zain appreciated 15.2% to escape from a seasonal low but logistics firm Agility, which has been under pressure since early November, moved lower by 16% in the review period. August 2009-listed Thuraya Real Estate dropped 25.6% and financial services company National International Holding dived 30.5%.

Saudi Arabia SE  (One month)

Current year high: 6,568.47    Current year low: 4,130.01

Market inactivity on the Saudi Stock Exchange due to the religious observances of Eid al-Adha in the first part of the review period was followed by downward pressures in early December. These pressures, however, appeared to abate somewhat as the TASI’s close at 6,153.85 points on Dec 17 was 2.61% down when compared with Nov 18. Sector indices for the most part did not stray far from the general trend and all sectors ended the period in negative territory, with the spillover from the Dubai market named as broad impact factor. The two sectors that underperformed the market were hotels and tourism as well as insurance. The latter dropped sharply between Dec 6 and 13 in a slide that was not so much seen as linked to the Dubai World financing problem as it was attributed to a combination of profit taking and response to local insurers’ exposure to costs from the Nov 25 flood in Jeddah that caused extensive damages to properties.

Muscat SM  (One month)

Current year high: 6,762.94    Current year low: 4,223.63

In an overall downward sloping trajectory, the Muscat Securities Market’s response to the Dubai World panic occurred as a drop of about 330 points and immediate recovery of 320 points between Dec 7 and 14. Outside of this interruption, the trend was a 2.27% drop over 17 trading days between Nov 18 and Dec 20, when the MSM index closed at 6,243.49 points. Volatility was clocked at 22.9%, according to Zawya. The banking sector index underperformed the other sectors both during the intra-month trough and for the whole review period, closing 6.5% lower on Dec 20 when compared with Nov 18. In individual stocks, poultry was on the side of seasonal lows while confectionary seemed inspired, at least on paper as Sohar Poultry Company was reported by Zawya to be the period’s worst loser (minus 77%) and Oman Sweets Company, the strongest gainer (plus 120%). Both stocks appear to be very rarely traded. 

Bahrain SE  (One month)

Current year high: 1,851.30    Current year low: 1,413.81

The Bahrain Stock Exchange, somewhat predictably as it was the GCC exchange with the weakest index performance in 2009, showed less profit taking and panic symptoms than its neighbors during the review period and closed at 1,447.57 points on Dec 15, a third of a percent up when compared with Nov 18. Banking shares were the clear losers, down 6.1%, whereas the investment sector advanced 7.3% and was the best performer on the BSE in the short review period, something of a market irony given that this sector was the biggest loser on the Bahraini exchange for the year to date. At the bottom of performance charts for the review period, Gulf Finance House gave up 16.2%, other share price losers were Al Salam Bank, Nass Corporation, Ahli United Bank, and National Bank of Bahrain, losing from 10.3% to 6.1%.Al Baraka Banking Group topped the gainers for the period with a 64.7% climb, recovery-style after price weakening in October and November.  

Doha SM  (One month)

Current year high: 7,624.45    Current year low: 4,230.19

The Qatar Exchange experienced blunt force impact of the Dubai World crisis directly after the Eid al-Adha holidays. The general index, which took an 8.3% hit on Dec 1, recouped losses by Dec 7 but then saw further fluctuations to close the review period with a marginal gain of 0.6%. All sector indices stayed range bound with the general index but a slide at the end of the review period relegated the insurance sector to the role of underperformer and only sector to close Dec 16 in negative territory when compared with Nov 17. Insurance similarly was the weakest sector on the DSM for the year-to-date period, recording a 10.7% drop from the start of January. Volatility reached almost 40% in the review period and losing stocks outnumbered gainers but the net gains and losses were less pronounced than on neighboring bourses. Ezdan Real Estate was the top gainer at 8.6% while the biggest losses were recorded by Qatar General Insurance and Reinsurance.

Tunis SE  (One month)

Current year high: 4,244.46    Current year low: 2,887.25

The Tunisian Stock Exchange dipped lower in early December but otherwise appeared unperturbed by the worries that shook investors in the Gulf region. Closing at 4,215.37 points on Dec 16, the Tunindex added 2.7% from its close on Nov 18 and this gain took the market’s increase beyond 46% from the start of 2009. Market heavyweights Poulina Group Holding and Banque de Tunisie edged up by 2% and 4%, respectively, in the review period. Cement manufacturer Ciments de Bizerte, a recent market entrant, dropped 9.9% at the low end of the performance charts. Best gainer for the period was SIAME, a manufacturer of electrical gear. Its share price advanced 71.5%.  

Casablanca SE  (One month)

Current year high: 12,224.21  Current year low: 9,405.86

The Casablanca Stock Exchange stumbled visibly in the first week of December. The general index dropped 330 points between Nov 19 and Dec 4, dipping below the 10,000 points line for the first time since late January. The market, however, rebounded from this seasonal low by presumed Dubai contagion and closed at 10,386.67 points on Dec 17, representing a marginal gain of 0.5% from the start of the review period. Measured against the start of 2009, the Moroccan exchange is down 5%. Market cap leader Maroc Telecom recorded a minimal share price drop in the review period (down 0.2%) whereas largest bank and second strongest scrip, Attijariwafa Bank, lost 5.6%. The number three and four by market cap, lender Banque Marocaine du Commerce Exterieur and real estate firm CGI, contrasted this by being among the top gainers, advancing 18% and 13.6%, respectively.

Egypt CASE (One month)

Current year high: 7,249.55    Current year low: 3,389.31

The Egyptian Stock Exchange’s EGX 30 index added 3.3% in the 30-day review period and closed at 6,477.86 points on Dec 17. The impact of the Dubai World crisis on the EGX was sharp and cut a 500-point gash into the index graph between Nov 25 and Dec 3, resulting in 45% volatility in the review period. However, the Egyptian exchange diverged from most other regional markets by gaining in both the review period and for the year-to-date, where the Egyptian bourse’s gain exceeded 40% and was second only to the Tunisian exchange. This confirmed in the final weeks of 2009 that the EGX was the region’s only large stock market to perform better than the MSCI world index‘s 30% year-to-date gain although shooting up not quite as high as the Emerging Markets Index with its 72% rise to Dec 15. Notable gainers on the EGX in the review period were telecoms scrip Mobinil, up 25.2%, and Orascom Construction Industries, up 17.1%. 

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Executive Editors

Executive Editors represents the voice of the magazine.

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