In another month tormented by bombs and battles over Lebanon, the Beirut Stock Exchange sustained life on small flame. The BSI moved from 1,230.29 points on May 31 to 1,189.18 points on June 25. Companies on the BSE used the time for revising their equity structures. Cement manufacturer Holcim Liban, saying it had excess capital, reduced its equity by over 16.5% and reduced its share volume through a 12-for-1 reverse stock split. Owners of BLC Bank, Qatar Investment Authority, announced its decision to divest of the stock after it did not realize the business growth it had aimed for in buying the Lebanese bank 18 macro-economically difficult months ago. BLC Bank had net profit of $ 3 million in the first quarter of 2007. Solidere panned out its future as hopeful parent of an internationally active affiliate, Solidere International, to shareholders.
Beirut SE: Blom (1 month)
Current Year High: 1,526.31 Current Year Low: 1,168.36
The Amman bourse entered June with an upward leap of some 213 points to a 5,878.26 reading, reversing a slide in late May. But the ASE index then proved analysts right who had said that the exchange’s gains in the first quarter of 2007 were too quick. The index slipped back and closed at 5,787.43 points on June 26. RCDI, an operator of an industrial park, was a notable gainer, moving up 37% during June. Real estate and financial sector companies accounted for much of the month’s news. Arab Bank mandated international banks to arrange for its first syndicated loan, a $500 million facility. First Jordan Investment Company, a real estate investment firm, said it will start subscription for an $85 million initial public offering in July; it had pushed back the IPO date twice in 2006.
Amman SE (1 month)
Current Year High: 6,543.67 Current Year Low: 5,267.27
The Abu Dhabi Securities Market had a cooling-off phase in June after its springtime increases. The index moved from 3,577.52 points on May 31 largely sideways, with a dip at the end to close at 3,534.81 points on June 26. A considerable amount of Abu Dhabi attention was directed at the United Kingdom where the ADSM ventured for a road show promoting the bourse as investment destination to London-based fund managers and financial experts. Of ten ADSM-listed companies participating in the mid-June trip, the majority represented the energy, banking, and real estate sectors. The bourse said the road show entailed 200 meetings with company delegations. ADSM also received a delegation from NYSE and SEC.
Abu Dhabi SM (1 month)
Current Year High: 3,701.90 Current Year Low: 2,839.16
The Dubai Financial Market Index followed a parallel trajectory to the ADSM with a slightly more pronounced dip and reduced trading volumes at the end of the month, ahead of the half-year results season. The index moved from 4,476.08 points on May 31 to 4,383.93 points on June 26. According to DFM statements, foreign investors accounted for about a quarter of trades on the bourse in the second and third weeks of June. Market heavy-weight Emaar was lackluster trading at around AED 12 with downward pressure in the last week of the month. Gulf Navigation, a transport sector scrip, moved from AED 1.19 to AED 1.36 in a single day of high volume June 13 but shed most of gains by the end of the month. At Dubai’s DIFC, international financial firms Merrill Lynch and Mizuho opened new offices; Calyon announced that it will do the same in July.
Dubai FM (1 month)
Current Year High: 4,985.39 Current Year Low: 3,658.13
The Kuwait Stock Exchange kept its optimistic mood and closed above 12,040 points on June 26, up by 550 points from its reading on May 30. The 12,000 range had been its historic high in early February 2006, from where the index then rather rapidly descended back. MTC continued its rise upon investor assumptions that the stock is a target for strategic buyers but analysts from Gulf Capital Group said at the end of June that they saw MTC as overvalued after rising 170% in the past 12 months. Speculation contributed to the KSE’s index boost across the 12,000 line at the end of June when people bought stock of Gulf Bank on media rumors that Citigroup wanted to acquire a majority share. Lebanon’s Solidere decided to withdraw its secondary listing from the KSE because its expectations for the cross-listing remained unfulfilled.
Kuwait SE (1 month)
Current Year High: 12,065.12 Current Year Low: 9,164.30
With local investors defying the views of analysts that the correction phase for Gulf bourses is essentially be done and over with, the Tadawul index insisted on remaining the region’s worst performer for another month. Sliding from 7,492.66 points on May 30 to below 7,000 points in mid June, the TASI crawled back up to close at 7,111.55 points on June 26. Kayan Petrochemicals, which had its IPO in May, started trading in late June with first-day gains of 30% that stayed below the extreme jumps hoped for by some hit-and-run investors. However, insurance sector debutants SABB Takaful, Salama, and Arabian Shield started their trading life with five-fold share price increases over their under-priced IPOs. Following its first-day leap, SABB Takaful more than doubled in the following ten days. Prince Al-Waleed Bin Talal’s Kingdom Holding announced that it will offer 5% in an IPO later this year.
Saudi Arabia SE (1 month)
Current Year High: 13,509.09 Current Year Low: 6,861.80
Although the Muscat Securities Market dipped sharply for a day in the aftermath of the country suffering historic cyclone Gonu, the MSM ended June close to its in-month record high of 6,306.24 points on June 17. The index closed at 6,271.89 points on June 26, up 160 points from the end of May. Year-to-date, the MSM is the GCC’s third-best performer with a gain of 12.37%. Banks and cement companies saw positive action following the Gonu disruption which forced suspension of three trading sessions. Alliance Housing Bank, which had rejected an offer from BankMuscat in May, agreed to sell 35% of its equity to Bahrain’s Ahli United Bank for $132 million.
Muscat SM (1 month)
Current Year High: 6,306.24 Current Year Low: 4,657.16
For its limited volumes, the Bahrain Stock Exchange was an upward escapee from most Gulf peers in June, with a 3.5% gain in the index to a close of 2390.98 points on June 26, compared with 2310.81 points on May 31. Gulf Finance House was among the BSE’s most actively traded stocks in June and closed almost 15% higher on June 26 than at the beginning of the month. GFH said it will list GDRs representing 14% of its equity on the London Stock Exchange before the end of June. Kuwait’s and Bahrain’s pension funds both denied rumors that they were seeking to sell their stakes in Ahli United Bank. The bank’s shares saw a comparatively high trading volume of 5.9 million shares on June 26. Dubai Financial agreed to buy 60% of Taib Bank. The BSE listed a $650 million sukuk of a privately held company, bringing the number of listed bonds and sukuk to 20.
Bahrain SE (1 month)
Current Year High: 2,384.18 Current Year Low: 1,996.68
In Doha, June was sideways trading month on levels about 400 points below the Doha Security Market’s 7750-points plateau in late May. Between its recording of 7,307.51 points on May 31 and its close at 7,244.63 points on June 26, the Doha index showed little fluctuation as if the summer had come earlier than elsewhere. Real estate firm Barwa saw heavy trading action on the back of its strong gains in April and May. The company announced the creation of a real estate bank as 100% subsidiary with a paid-up capital of almost $140 million. Shares of Mawashi, an agro-sector company, rose by 17% between June 1 and 26.
Doha SM: Qatar (1 month)
Current Year High: 8,276.65 Current Year Low: 5,825.80
The Tunisian bourse showed a V-shaped trajectory in June, dropping between the start of the month and June 11 before moving up until June 20 and receding slightly to the end of the month. The Tunindex closed at 2,519.13 points on June 26, less than 30 points down from May 30. The bourse is 8.07% higher compared with the start of 2007, trailing on its North African peers in Cairo and Casablanca.
Tunis SE (1 month)
Current Year High: 2,712.33 Current Year Low: 1,880.55
The Moroccan exchange shed some 350 index points in the first half of June and showed little movement in the second half of the month. It closed at 11,526.28 points on June 25, almost 1,200 points below its year high from early May. The index is up 21.59% from the start of the year. The Casablanca stock market will see the addition of m2m group, a locally grown information technology firm, which was reported to have scheduled a $17 million initial public offering for 20% of its equity for late June. In a secondary listing action, the kingdom’s finance minister announced that the government will shortly bring another 4% of Maroc Telecom’s equity to the market. The stake will be worth around $565 million, according to newspaper reports. Maroc Telecom first went public with a 15% IPO in November 2004; at the time the offering represented little more than half of the stock’s current value of $16 per share. The secondary offering was delayed from 2006.
Casablanca SE All Shares (1 month)
Current Year High: 12,723.23 Current Year Low: 6,839.94
The Cairo & Alexandria Exchanges’ Hermes Index closed at 69,769.28 points on June 26, reflecting a gain of 13.83%, year to date. On the month, the index closed just under 500 points higher. In a peer-to-peer comparison to the Saudi bourse over the past 24 months, CASE performance looks strong. While the two largest Arab exchanges run along fairly parallel tracks between mid 2005 and mid 2006, a valuation scissors has opened wide since. Compared with their index values a year ago, the Hermes Index has climbed over 65% while the TASI slumped by 45%. In early June, Egypt was the stage of the Arab world’s largest private equity deal to date when UAE investment firm Abraaj Capital bought the Egyptian Fertilizers Company for $1.41 billion. Vehicle assembler and distributor Ghabbour Auto reported 7 times oversubscription on its private placement. Vodafone Egypt, with an infinitesimal amount of free-float shares as of recent, said it will de-list from CASE.
Cairo SE: Hermes (1 month)
Current Year High: 70,952.61 Current Year Low: 41,965.37
