The largest securities market in the Middle East and North Africa, Saudi Arabia’s Tadawul, offered investors an avenue to take profit or redirect gains into new opportunities in week 12 of 2014 after reaching a peak at the end of week 11. Fitting to this assumption, the TASI retreated ever so slightly to a close of 9305.64 points on March 20, representing a 0.9 percent drop from the March 16 opening. Another Gulf exchange with a downtrend was Oman’s Muscat Securities Market (MSM), whose benchmark index dropped for the second consecutive week. It lost 1.8 percent week-on-week.
Exchanges in Kuwait, Bahrain, Qatar and the United Arab Emirates moved in positive territory. The indices of the Bahrain Bourse and Kuwait Stock Exchange gained 0.9 and 1.4 percent, respectively. The Qatar Exchange was the slowest gainer in the Gulf Cooperation Council this week, inching up 0.5 percent, and the Abu Dhabi Exchange similarly snailed ahead with 0.7 percent growth. So the flag of the highest Gulf and regional increase rose over the towers of Dubai, thanks to a best-in-MENA 8.1 percent index gain.
The Dubai Financial Market’s growth leadership was in no way challenged by index performances in Morocco, where the MASI added less than 0.1 percent between March 17 opening and March 21 close; and Tunisia whose Tunindex gave up a tad more than 0.1 percent in the same period.
In the Levant markets, Jordan’s Amman Stock Exchange index behaved nicer only by comparison with the aforementioned two. It achieved a 0.9 percent weekly gain.
The Lebanese market, where stakeholders witnessed the amazing feat of Parliament discussing and approving the policy statement of the country’s latest-born cabinet on March 19 and 20, seemed not in the least inspired by the political accomplishment. The BLOM Index for the Beirut Stock Exchange slipped to a close of 1219.31 points at the end of March 21, representing a 0.3 percent drop since the start of the trading week.
The only other market in MENA then to give Dubai a run for investor confidence in the past week was the Egyptian Stock Exchange where institutional foreign investors were driving demand, according to local media. With volumes not seen since October 2012, the EGX 30 Index climbed 3.9 percent during week 12 and achieved a five-year peak of 8460.57 points intraday on March 20 before closing at 8459.38.
While the EGX according to Bloomberg is up 66.3 percent from a year ago and now 25.6 percent for the year to date, its one-year growth is still far behind the DFM’s gains of a truly whopping 135.8 percent. With a benchmark index gain of 29.2 percent for the year to date, the DFM is also the best performer in MENA for 2014 thru week 12 and shows the year’s second highest total dollar return in MSCI frontier and emerging markets country indices according to Thomson Reuters.
To appreciate the strength of the Dubai market it is worth taking a look at its real estate stocks and specifically the property sector’s flagship, Emaar. On March 15, just in time for the start of the new trading week, the company handed investors two major pralines by announcing planned distribution of 15 percent cash dividend along with 10 percent bonus shares on the back of its strong 2013 performance, along with stating that it intends to take its shopping mall and retail unit public with an initial public offering of 25 percent in this well performing subsidiary.
From selling the shares Emaar said it expects to raise “between AED 8 to 9 billion (over US$ 2 to 2.4 billion), [which] will be primarily distributed as dividend to the company’s shareholders.” With such a volley of sweet announcements for shareholders (including the Emirate of Dubai as owner of almost a third of Emaar stock), the company might be liable for raising the sugar levels in the minds of its investors to near delirious highs, at least until the two dividend payment events for 2013 and for the flotation of Emaar Malls & Retail. And since Emaar share price movements illustrate the strong impact of the real estate sector’s perceived strength on the Dubai Financial Market, not only in the gains in the year to date but perhaps even more so in the long-term view of the past five years and beyond, hopeful DFM investors will be very observant of this stock in the coming months.