Beirut SE (one month)
Current Year High: 1,550.53 Current Year Low: 705.56
The Beirut Stock Exchange (BSE) was highly correlated to global and regional trends in the month of July, in addition to uncertainty related to the formation of a new cabinet. The MSCI Lebanon had dropped 6% in line with the global equity sell-off and falling oil prices in the first two weeks of July. However, political stability and news showing the economy will post strong growth numbers in 2009 drove the market back to 1056.99 points, down only 0.34% as of July 22. Positive economic news contributed to the recovery, including strong tourist and capital inflow numbers despite several minor incidents in South Lebanon. Banque Bemo’s shares were the worst performers, down 4.26%, followed by the country’s giant real estate company Solidere, whose A shares managed to recover from an 11% drop to a milder 2.33% decline. BLOM Bank’s shares topped the performance list, up 2.78%, followed by Byblos Bank with a 2.17% return. Despite the relatively tame performance of equities on the BSE in July, the market continues to lead the MENA region performance on a year-to-date basis with an appreciation of almost 31%.
Amman SE (one month)
Current Year High: 4,702.43 Current Year Low: 2,482.46
The Amman Stock Exchange (ASE) posted the worst performance among the 12 countries under review, falling 5.51% to 2584.47 points through July 23. The index even hit a five-year low of 2,482.46 points on July 13. All market sectors dropped significantly, led by insurance and banking stocks which fell 9.59% and 6.60% respectively, while the industrial sector led the market with a drop of 3.74%. Jordan Clothing Company led stock performance with a 36.61% increase, followed by Jordan Central at 36.59%, whereas Arab Life and Accident Insurance Company fell 37.02% and Al Tajamouat for Catering and Housing Company lost 36.12%. The total value of real estate transactions dropped 38% year-over-year in the first six months of 2009 and the government’s budget deficit widened from $705 million to $759 million over the same period. On the other hand, the country’s tourism revenues grew 3% through the end of May, and the number of construction permits posted a 32.1% year-over-year gain in the first five months. The country’s trade deficit also narrowed by 32.2% through the end of June as a result of lower crude oil imports.
Abu Dhabi SM (one month)
Current Year High: 5,005.17 Current Year Low: 2,136.64
The Abu Dhabi Stock Exchange (ADX) index rose 3.03% to 2,711.17 points as of July 23. Like other GCC markets, the ADX index hit a bottom in mid-July, driven by drops in oil prices, uncertainty around second quarter earnings, and the undetermined level of exposure of UAE banks to Saad Group and Al Ghosaibi. On the positive side, the market index has been steadily trending upwards since hitting the bottom in early November, and July was no exception especially that consumer and banking stocks continued to lead the market, rising 6.56% and 6.42%, respectively. On the other hand, the worst performing sectors were insurance (-6.23%), real estate (-5.58%), and construction (-5.21%). The market’s leading stock was the food industry’s Agthia (22.79%), followed by several banking stocks including National Bank of Abu Dhabi (14.80%) and First Gulf Bank (14.23%). Aabar Investments acquired a 4% equity stake in Tesla Motors from Daimler, and Abu Dhabi National Energy Company announced plans to spend $1.5 billion on acquisitions in the next 9 months.
Dubai FM (one month)
Current Year High: 5,422.31 Current Year Low: 1,433.14
Almost nine months after the peak of the global equity sell-off, the Dubai Financial Market (DFM) has hardly recovered. The market index dropped another 1.83% in the month through July 23, to 1,751.76 points, still at December 2008 levels. Emaar Properties announcement in late June to merge with several of its competitors mostly drew a negative response. Moody’s downgraded the company’s credit rating and placed it on review for possible further downgrade, driving down the company’s shares 7.91% and the whole Real Estate sector 5.85% to become the worst performing sector of the month. The best performing sectors were Transportation (9.06%) and Utilities (5.81%) coupled with strong performance by Aramex (23.97%) and Kuwait Finance and Investment Company (14.91%). On the other hand, Arab Insurance Group (-15.56%), Shuaa Capital (-12.79%), and Emirates NBD (-11.68%) were among the worst five performers in July. During the month, the UAE Central Bank called for a meeting with commercial banks to assess potential problems to exposure to Saad Group and Al Ghosaibi.
Kuwait SE (one month)
Current Year High: 14,997.20 Current Year Low: 6,391.50
Like most GCC stock markets, the Kuwait Stock Exchange (KSE) had a tough first half of July on the back of declining oil prices, but the recovery in oil prices and global equity markets was not enough to save the KSE from a 5.02% decline to 7,675 points as of July 22. Earnings in Kuwait were dismal as Mazaya Holding, Al Ahli Bank, and the National Bank of Kuwait reported second quarter declines in profits of 63%, 77.1%, and 32%, respectively. All sectors in Kuwait posted negative returns in July, but the real estate sector was the worst performer, dropping 7.93% through July 22, followed by the industrial and investment sectors which lost over 6.81% and 6.25%, respectively. Only the index of stocks on the parallel market rose 10.44% through July 20, but insurance, the best performing sector, lost 1.89% followed by services which dropped 2.28%. Al Maiden Clinic for Oral Health Services was the leading performer, up 100% over the review period, followed by Osoul Investment Company (35.09%) and Osoul (42.11%). The worst performance was delivered by Gulfinvest International (-43.94%).
Saudi Arabia SE (one month)
Current Year High: 9,022.31 Current Year Low: 4,130.01
The Saudi Stock Exchange (TASI) index ended the review period up 1.32% at 5,670.42 points as of July 22, on solid earnings from the banking sector and recovery in oil prices from early July lows. The month had started with a continuation of the drop in equity prices from the June peak of 6094.91 as exposure to credit-troubled Saad Group and Al Gosaibi, and uncertainty surrounding second quarter earnings results cast a dark shadow on investor sentiment. However, by the third trading week, Saudi banks had reported solid growth in second quarter profits which reached almost $1.73 billion. The banking sector benefited strongly from quarterly results, rising 2.35% through July 22, but was still outperformed by the hotel and tourism sector which advanced 6.37%, followed by the industrial and telecom & IT sectors which rose 4.08% and 2.76%, respectively. On the other hand, the insurance sector had the worst performance, dropping 4.93% through July 21. Petrochemicals had a roller coaster month after China announced that it began an anti-dumping investigation into methanol imported from Saudi Arabia.
Muscat SM (one month)
Current Year High: 11.178.58 Current Year Low: 4,223.63
The rebound of stocks in the second half of July drove the Muscat Securities Market (MSM) index up 3.49% to 5,808.07 points through July 23. All three market sector were in the green, with the banking sector leading the way, up 1.54%, followed by services and industrial at 1.38% and 0.51%, respectively. Market sentiment was generally positive as the government said it plans to boost its oil output by 20,000 barrels per day by the end of 2009. The best performing stocks were Gulf International Chemicals (12.58%), Oman United Insurance Company (12.5%), and Oman Cables Industry (12.07%). On the other hand, Al Hassan Engineering Company, Oman Chlorine, and Gulf Investment Services Company posted the worst performance, dropping 14.38%, 13.88%, and 12.33%, respectively. In corporate news, Standard and Poor’s downgraded United Insurance Company’s long-term credit rating, and HSBC’s MENA Infrastructure Fund acquired 32.8% of United Power Company for $26.5 million. Furthermore, Bank Muscat reported a 4.5% rise in its first half net profits to $157 million.
Bahrain SE (one month)
Current Year High: 2,811.25 Current Year Low: 1,483.52
The Bahrain Stock Exchange (BSE) index posted the worst monthly performance among GCC markets and the second worst in our review of the MENA region, dropping 5.50% to 1,494.63 points as of July 23. The Bahraini market never actually recovered from the fall 2008 global equity sell-off, hitting a five year bottom of 1,483.52 points on July 21. The investment and banking sectors caused the biggest drag on the market, falling 7.49% and 5.96%, respectively, during our review period, while investors shifted to the defensive healthcare sector, the only sector in the green, which rose 1.77% over the same period. Only six out of 28 stocks rose in July, led by Banader Hotels Company (7.58%) and Esterad Investment Company (3.87%). Leading the decliners were Albaraka Banking Group (-23.91%), Bahrain Islamic Bank (-17.05%), and Ithmaar Bank (-15.69%). Bahrain Islamic Bank had announced a second quarter loss driven mainly by provisions. Bahrain Telecommunications Company said it was proceeding in its purchase of a 49% ownership stake in India’s telecom operator S Tel.
Doha SM (one month)
Current Year High: 11,758.06 Current Year Low: 4,230.19
After a sharp decline in the second week of July, the Qatar Exchange Index stabilized and rebounded to end our review period through July 23, down only 0.82% to 6,438.30 points. The rebound came on the heels of strong earnings from the country’s largest banks, propped up by the government’s purchase of real estate investments and local equities to free up bank capital for lending. Earnings propelled the banking sector to the top with a 1.51% return during the review period, ahead of the industrial sector which returned 0.91% also on strong earnings announcements. The services sector which shed 7.81% despite a mid-month rebound. The best performing stock of the month was United Development Company (22.04%), followed by Qatar Electricity and Water Company (8.68%). Several large banks were also among the best performing stocks, including Doha Bank (4.6%) and Qatar Islamic Bank (4.97%). Real estate and investment companies were the month’s laggards, led by Ezdan Real Estate Company (-21.48%) and Dlala Brokerage and Investment Holding (-17.58%).
Tunis SE (one month)
Current Year High: 3,677.46 Current Year Low: 2,836.64
After a long rally that started in December 2008 that drove Tunisian equities up 30% to a peak on July 1, the Tunisia Stock Exchange Index (Tunindex) let out some steam, falling 1.43% to 3,623.96 points on July 23. Leading the turnaround were Automobile Reseau Tunisien et Services (-15.01%), Société Tunisienne des Industries de Pneumatique (-14.16%), and Société Tunisienne d’Assurances et de Réassurances (-13.67%). The best performing stocks were Société Tunisienne d’Entreprises de Télécommunication (21.53%), followed by Société Nouvelle Maison de la Ville de Tunis (16.61%), and Société Magasin Général (12.94%). The market lacked significant catalysts during the month, but some positive announcements were made. The Tunisian parliament passed a law that would allow early retirement for public employees in order to help employ up to 7,000 young university graduates.
Casablanca SE (one month)
Current Year High: 14,463.40 Current Year Low: 9,405.86
Like most MENA markets, the Casablanca Stock Exchange (CSE) index started the month of July by dropping significantly in the midst of another global wave of equity selling and pessimistic views of the world economy. However, unlike most MENA exchanges, the CSE index never rebounded. The drop continued through July 22, to reach -5.51% with the index standing at 10,949.81 points. The country continues to suffer from the fallout in tourism activity, the decline in exports, as well as the drop in revenues from remittances as a result of the decline in economic activity in Europe. As a result, the hotels and leisure sector remains the worst performing stock in 2009, down 10.59%, followed by construction and building materials (-10.04%). The best performing sectors so far in 2009 are transport (52.38%) and mining (51.9%). The leading stock was Société des Brasseries du Maroc (16.5%), followed by Involys (10.83%). On the other hand, the worst performing stocks were Microdata (-14.22%) and Aluminum de Maroc (12.69%).
Egypt CASE (one month)
Current Year High: 9.533.54 Current Year Low: 3,389.31
The Cairo and Alexandria Stock Exchange (CASE) posted the best performance in the MENA region under review through July 22, rising 4.3% to 5,947.89 points. The market was lush with positive economic news during the month, including an announcement by the Minister of Investment that the country’s GDP growth in 2009/10 will reach 4.5%, down only slightly from 4.7% the previous year. Real estate stocks led the late month rally, with top performers including Egyptian Real Estate Group (168.37%) and Zahraa ElMaadi Company for Investment and Urbanization (74.92%). The real estate sector was boosted by the government’s decision to extend the export ban on cement until October 2010 to stabilize local cement prices. The worst performing stocks were Al Watany Bank of Egypt (-23.46%) and El Shams Housing and Development Company (-16.31%). In corporate news, private equity firm Actis signed an agreement worth $244 million to acquire a 9.33% stake in the Commercial International Bank.
