Beirut SE
Current year high: 1,039.30 Current year low: 842.04
> Review period: Closed July 24 at 886.92 points Period Change: +0.27%
The traditional post-government formation rally failed to materialise. Instead, markets toiled under the weight of local and regional worries as Moody’s changed its outlook on four of the largest Lebanese banks to negative and domestic economic indicators weakened. Indictments issued by the Special Tribunal on Lebanon plus ongoing turbulence in neighboring Syria and in Egypt made the BSE performance look almost Phoenix-like, with Solidere rebounding to neutral territory and Bank Audi reporting a 9.3% increase in second quarter profits.
Amman SE
Current year high: 2,477.99 Current year low: 2,083.56
> Review period: Closed July 25 at 2,090.18 points Period Change: -0.16%
Amman’s financial markets welcomed long-awaited stability following months of losses. The country’s focus shifted to securing energy supplies after the Arab Gas Pipeline bringing cheap Egyptian gas was sabotaged, costing the country millions of dinars in daily losses. While the gas is likely to flow again by early August, tourism revenues are not, as tourist numbers have already fallen 14% YoY in the first six months. Promise comes from ASX heavyweight Arab Bank with a 5.14% return during the review period, a possible sign of better times to come.
Abu Dhabi Exchange
Current year high: 2,833.09 Current year low: 2,471.70
> Review period: Closed July 25 at 2,663. 13 points Period Change: -1.5%
ADX stocks entered July with some gains but their rally of hope in June petered out. Market heavy Etisalat was resilient even when the company was accused of foreign direct investment violations in India. In banking, NBAD and First Gulf delivered strong 1H earnings growth. Construction and real estate stocks continued their 3-month trend south with little support in sight. Readying themselves for Ramadan, investors were in profit-taking mood and the ADX index weakened at the end of the review period.
Dubai FM
Current year high: 1,781.92 Current year low: 1,352.24
> Review period: Closed July 25 at 1,510.58 points Period Change: -0.42%
DFM investors were more active than their ADX peers in the pre-Ramadan lull, and attention focused on the Greek bailout and forthcoming quarterly earnings. Second quarter profits swelled 85% YoY at Emirates NBD, and investors are bracing for more positive banking results. Tipping the other side of the balance was Emaar Properties, whose Indian operations reported heavy losses, pushing its shares down 4.5% during our review period. Meanwhile, there’s the underlying positive sentiment about the potential MSCI upgrade even if the official decision spills over into 2012.
Kuwait SE
Current year high: 7,129.30 Current year low: 5,973.10
> Review period: Closed July 25 at 6,065.3 points Period Change: -2.36%
Solid second quarter results at National Bank of Kuwait (NBK), Boubyan Bank and Kuwait Finance House (KFH) were not enough to jump-start stock prices. Instead, profit takers ruled the charts and pushed the KSE index down to a seven-year low of 5,973.1 points on July 18, as market heavyweights NBK and KFH tumbled 6.9% and 10%, respectively. Kuwaiti investors await further positive earnings results, but the KSE benchmark ended the review period more than 12% down for the year to date.
Saudi Arabia SE
Current year high: 6,788.42 Current year low: 5,323.27
> Review period: Closed July 25 at 6,472.03 points Period Change: -1.58%
Dismal performance of Tadawul stocks in July in fact reflected profit-taking following dozens of strong earnings reports across various sectors. All banks except SABB and Samba posted second quarter profits and major companies such as Savola and Kingdom Holding posted double-digit growth in net income. Investors still snatched some returns from SABIC’s 2.9% gain through July 25, and are looking for more as Jadwa Investment expects global moves to outweigh the cyclical downward Ramadan pattern.
Muscat SM
Current year high: 7,027.32 Current year low: 5,904.68
> Review period: Closed July 25 at 5,939.45 points Period Change: +0.39%
Muscat securities appear to have touched bottom in July following the precipitous dips in February and April. Banking stocks were buoyed by rising profits at National Bank of Oman and Bank Sohar, although legal disputes drove down BankDhofar’s profits in the second quarter. The export-oriented economy was not insulated from the global slowdown, but the outlook remains positive, supported by expectations of a global recovery and increased government spending. Among the greener pastures was Omani Qatari Telecommunications Company which added 1.76% during our review period.
Bahrain Bourse
Current year high: 1,475.10 Current year low: 1,298.35
> Review period: Closed July 25 at 1,298.95 points Period Change: -1.57%
Rolling downwards has become the norm for Bahraini stocks. While the government was announcing plans to dig deeper for natural gas to meet the country’s rising demand, stocks were struggling to dig their way back up, instead giving away 12% from their 2011 peak. Rising profits at Ahli United Bank and National Bank of Bahrain did little to assuage fears of future unrest as the main Shiite opposition party pulled out of national dialogue. Ironically, S&P affirmed the country’s sovereign debt rating after relative stability had returned, but maintained a negative outlook.
Qatar SE
Current year high: 9,242.63 Current year low: 7,004.66
> Review period: Closed July 25 at 8,399.8 points Period Change: +0.46%
Although the Qatar Exchange is down 3.5% for the year to date, trading activity in July was only slightly diminished versus June and reflected the positive mood in the country due to rising oil prices and strong economic prospects, driving up heavyweight Qatar Telecom 1.9% through July 25. Banks and real estate stocks added to the cheer after Qatar National Bank reported strong gains in second quarter profits and a report by Barclays Wealth showed high net worth individuals expect real estate to be a safe short-term investment.
Tunis SE
Current year high: 5,681.39 Current year low: 4,058.53
> Review period: Closed July 22 at 4,399.01 points Period Change: +2.1%
Tunindex stocks aim for the stars and for the second consecutive month hit first place in the MENA region. Despite continued skirmishes between various groups ahead of October elections, the end of oppressive rule is breathing new life into tourism and trade, with the food sector especially benefiting from exports to neighboring war-torn Libya. Tunis Air reported strong increases in bookings and was swiftly rewarded with a 7.2% monthly return through July 22. Uncertainty about election results and post-election democratic processes remain a major source of investor unease.
Casablanca SE
Current year high: 13,397.47 Current year low: 11,213.55
> Review period: Closed July 25 at 11,341.1 points Period Change: -1.48%
The king won a unanimous, and by government accounts, democratic, 98% “yes” vote for a new constitution. Yet investors were not visibly emboldened by the king’s bids for change under his own leadership, which was deemed “inviolable” in the new constitution. The MASI kept sliding in July and slumped to a 17-month low at the end of the review period. Immediately following the constitutional vote, the Moroccan government announced plans to sell parts of its stakes in Maroc Telecom and Royal Air Maroc.
Egypt SE
Current year high: 7,210.00 Current year low: 4,878.00
> Review period: Closed July 25 at 5,104 points Period Change: -5.0%
Investors headed for the trenches as Egyptian protestors roared back into Tahrir Square. Already fragile stocks retreated back into the red in July as Commercial International Bank and Orascom Telecom fell 8.3% and 4.2%, respectively. Escaping the selling pressure was Telecom Egypt, rising 5.6% ahead of an anticipated dividend announcement. Orascom Construction was flat despite securing a major Saudi Infrastructure contract and $350 million in loans from the International Financial Corporation.
