As all Arab equity markets scaled the first quarter of 2014 with some index gains, optimistic share-buying secured a good start to the second quarter for Gulf equities, with new five-year highs in three of the seven securities markets in the Gulf Cooperation Council. Elsewhere, several other Arab markets also had a good week in index terms but the Egyptian and Omani markets suffered.
[pullquote] All GCC securities markets were in positive territory for the year to date [/pullquote]
The good performance of Arab markets coincided with relatively cheery news from developed and emerging stock markets, where the S&P 500 hitting a record high, the Dow Jones narrowly missing, while another global equities index reached a six-year high.
The Dubai Financial Market (DFM), Qatar Exchange (QX) and Saudi Tadawul all got up to their highest readings since the recession began in April 2009. Closing the trading week respectively at 4,618.28 points, 11,983.87 points and 9,558.46 points, the benchmark indices of the three, in the year to date, were up 39.25 percent, 20.13 percent and 13.16 percent respectively.
While all three markets moved higher in every single day of week 14, the DFM was the biggest gainer with 5.4 percent between market opening on March 30 and the close of the April 3 session. The markets in Doha and Riyadh saw gains of 4.1 and 1.4 percent, respectively.
Likewise, the Bahrain Bourse also had no single day of drops in week 14 and gained 2 percent on the week. When compared with the other performers, the Abu Dhabi Exchange was a tad sluggish in the second half of the trading week but also achieved a 1.4 percent gain for the period.
The Kuwait Stock Exchange (KSE) Index on the other hand stayed for a second week in sideways motion and dropped 0.2 percent. Only the Muscat Securities Market (MSM) went noticeably south among the GCC seven; its index lost 2.1 percent in five consecutive days of selling.
Despite this, all GCC securities markets were in positive territory for the year to date; the KSE and MSM indices were up 1.49 percent and 2.78 percent respectively. The index gains of the Bahrain Bourse and ADX, at 14.34 percent and 17.96 percent, were in the same pretty range as those of QX and Tadawul.
While some Gulf equity market may be booming,the situation in the Levant is more subdued. Both Levant markets were also up for the year to date at the end of week 14, but their growth was less pronounced.
Lebanon’s BLOM Index, albeit in insignificant trading volumes, gained 0.1 percent translating into 5.98 percent year to date. Jordan started week 14 low after some pressure in the previous week but the Amman Stock Exchange Index then recovered for a weekly gain of 1.1 percent. This gave the ASE Index an up of 6.95 percent year to date.
North African countries, too, have seen small but significant growth in their stock exchanges so far in 2014.
Tunisia, North Africa’s smallest securities market, rose 0.3 percent on the week and the Tunindex closed the review period 4.93 percent up when compared with the start of 2014. Morocco’s MASI, off an earlier 52-week high reached on March 27, was moving indecisively up and down during week 14 to end the period with a net drop of 0.4 percent. Its year to date gain to April 4 was 4.48 percent.
The Egyptian Exchange saw the selling and profit taking from the end of week 13 continue in week 14 and the EGX 30 Index dropped 6.6 percent between March 30 and April 3. One large share divestment in the period, of 2.6 percent in Egypt’s Commercial International Bank by UK-based private equity firm Actis, was described as “normal transaction” by Cairo-based investment bank EFG-Hermes.
The investors’ response to the presidential candidacy by military head Abdel Fattah el-Sisi was generally spun by Cairo-based analysts into an expected correction. However, the near ten percent index fall between Sisi’s announcement and April 3 represents the largest drop in the Egyptian securities market in more than nine months.