Beirut SE: Shuaa (1 month)
Current Year High: 3,399.69 Current Year Low: 1,761.53
The Beirut Stock Exchange had a stellar awakening in May and the BSI closed at 1999.36 points on May 23. The shares of Solidere flew to highs unprecedented in the company’s history as soon as Lebanon’s conflicted political opponents reached an unexpected agreement on May 21 to elect a president and downtown Beirut was released from the stranglehold of an 18-month demonstration. Solidere moved limit up at 15% on the news and the three major banking stocks added between 8 and 10%. On May 22, the traded value of Solidere shares exceeded $50 million — way above the BSE’s average daily trading values in the past year — and the stock jumped another 15% to close at $35.70.
Amman SE (1 month)
Current Year High: 9,330.70 Current Year Low: 5,560.56
Glad tidings also from the Amman Stock Exchange as a second straight month of gains pushed the ASE index above 9,000 points by May 7 and to a pinnacle of 9,330.70 points on May 14 before softening to 9,179.20 points by its May 22 close. The four sub-indices moved largely in step with the general index. Year to date, the ASE index gained 22.1%, driven by a phenomenal 79.3% climb of the industrial index. The ASE’s P/E ratio reached 26.73x, the second highest in MENA. Arab Bank reported 41% higher first-quarter profits and Q1 profits of Jordan Phosphate Mines soared 84% from a year ago. The Jordanian Securities Commission approved the planned initial public offering of what will become the Hashemite Kingdom’s first mortgage lending specialist.
Abu Dhabi SM (1 month)
Current Year High: 5,054.35 Current Year Low: 3,327.86
The newly rebranded Abu Dhabi Securities Exchange (ADX) traded sideways in May. The general index closed at 4,961.14 points on May 22, compared with 4988.86 on Apr 30. Top sub-sector was the industrial index which added 12.7% over the period, followed by construction with 4.3%. The consumer and telecom sectors were notable underperformers, with losses of 7.5% and 3.9% on the month. Arkan Building materials made news by announcing a deal with Aldar Properties which made it a major supplier to Abu Dhabi’s biggest developer. The market authorities announced in early May that they converted the eight-year-old name of Abu Dhabi’s securities trading place from Market (ADSM) to Exchange to signal its willingness to offer increased sophistication and to attract more foreign listings.
Dubai FM (1 month)
Current Year High: 6,291.87 Current Year Low: 3,968.09
The Dubai Financial Market slipped back in May as its positive momentum from the previous month fizzled out. On May 22, the general index closed at 5,696.61 points, down from 5,815.53 points on May 1. Sectors generally moved range bound with the overall index, except for the materials sub-index. Materials showed quite a bit of volatility throughout the month and closed 5.45% lower on May 22 when compared with the beginning of May. Year to date, the DFM lost 3.97% underperformed its peers in Abu Dhabi and elsewhere in the GCC with the exception of Saudi Arabia. Emaar Properties share prices again weakened slightly and closed at $3.13 on May 22. Fellow real estate firm Deyaar pulled out of a development deal in India, continuing to make negative headlines following an embezzlement case in April. Deyaar shares nonetheless traded in the general range of its sector and the overall market in May.
Kuwait SE (1 month)
Current Year High: 15,057.70 Current Year Low: 11,348.60
The Kuwait Stock Exchange roared into May with a mini-rally that drove the index to a new historic peak of 15,057.70 points on May 7. The KSE closed a tad lower at 14,957.50 on May 22. Real estate and insurance were the bourse’s top gainers in May, adding 6.2% and 4.2%, respectively. The banking sector index dropped 4.4%. In terms of first quarter results, banks led KSE listed companies in terms of total earnings per sector with $1.1 billion, followed by investment firms with $1.06 billion. In year-on-year comparison, however, the highest-gaining sector was real estate with a 43.3% increase in profits. Banking sector profits were 26.7% higher than in Q1 2007 whereas profits in the investment and insurance sectors dropped by 52.3% and 41.6%. The KSE was closed during a three-day mourning period in mid May after the death of its former emir, Sheikh Saad Abdullah al-Sabah.
Saudi Arabia SE (1 month)
Current Year High: 11,895.47 Current Year Low: 6,861.80
May was a moderately unfriendly month for numbers on the Saudi Stock Exchange, which continued to hold the red lantern for MENA stock market performance in 2008 to date. At its close on May 21, the TASI stood at 9,672.62 points, compared with 10,066.16 points at the end of April. On the year-to-date trajectory, the TASI’s loss of 13.45% to May 21 exceeded, by almost 10 percentage points, the loss of the DFM index, which was the period’s second worst performer among the region’s major exchanges. SSE trading volumes were unexciting as investors were said to put funds aside for the June trading debut of Inma Bank and for a rights issue by Riyad Bank. Another newcomer, Zain Saudi Arabia, achieved good trading volumes in its second month on SSE.
Muscat SM (1 month)
Current Year High: 11,489.62 Current Year Low: 6,042.93
The ascent of Omani stocks slowed in May when compared with the Muscat Securities Market’s strong growth phases in February and April this year. Entering the month at 11,210 points, the MSM index nonetheless still had enough breath to inch up to a new year high of 11,471.56 points on May 22. With its 26.96% gain since January 1, the MSM leads the GCC bourses in this regard. While the banking sector trailed the market, the services index added 2.71% during May and outperformed the general index by almost 1 percentage point. Among services sector gainers was the Salah Port Services Company which climbed more than 19% to May 22 after announcing on April 30 that its first-quarter results were more than doubled from a year ago.
Bahrain SE (1 month)
Current Year High: 2,889.22 Current Year Low: 2,295.98
The Bahrain Stock Exchange had a positive month on the balance. After losing some 34 points in the first week of May, the index came back and gained almost 80 points to close at 2885.09 points on May 22, a level very close to the year high of 2889.22 which it had reached in March. The banking sector did well and improved 7.41% in course of May. The hotels and tourism sector remained buoyant also above the general index’s performance whereas the sub-indices for insurance and for investment firms shed 1.33% and 1.88% respectively, underperforming the market. Among GCC bourses, the BSE showed some of the most attractive valuation ratios in May. It’s average price to earnings ratio stood at 11.83x on May 22, almost 5 percentage points lower than the GCC average of 16.67x and 9 percentage points below the Doha bourse fairly expensive 20.99x.
Doha SM: Qatar (1 month)
Current Year High: 12,289.40 Current Year Low: 7,244.63
The Doha Securities Market took the trophy of being the best performing GCC bourse between May 1 and May 22. Its 6% net gain included a 2.6% drop on the last two days of the review period when profit taking caused the DSM general index to recede from its May 20 year high of 12,289.40 points. All four sub-indices stayed on positive ground and the banking sector led the market’s movement with a net gain of 7.2% while the industrial sector was its laggard with net gain of 2.2%. DSM heavyweight Industries Qatar got a buy nod from analysts on the strength of its $20 billion expansion program. After an 8-week uptrend in its share price, IQ traded at P/E ratio of 16.71x on May 22 but was still below the DSM P/E ratio of 20.99x which is the highest in the GCC and the third highest in MENA.
Tunis SE (1 month)
Current Year High: 3,031.70 Current Year Low: 2,436.94
The Tunindex closed at 2,963.55 points on May 23, down 18.36 points from 2,981.91 on April 30. However, share price movements displayed some intra-month volatility with a 142-point slide from a year high of 3031.70 points on May 9. Of market heavyweights, beverage maker SFBT hovered in a range of $11.51 to $11.73 after announcing 2007 results of $38.2 million. Banque de Tunisie shed almost 17% in an intra-month decline but maintained its position as the market cap leader on the Tunisian Exchange, which it had taken over from SFBT in spring. BT appointed a new management team in mid May as part of corporate restructuring activities.
Casablanca SE All Shares (1 month)
Current Year High: 14,925.99 Current Year Low: 11,271.35
Companies on the Casablanca Stock Exchange traded sideways in the review period as the index moved from 14,387.79 points at the end of April to 14,451.08 points on May 23. While this trading range was about 3% off index peaks reached earlier in 2008, the sheltered Moroccan stocks remained quite a bit dearer than stocks on other MENA bourses. At market ratios of 35.18x for price to earnings and 7.02x for price to book value, these CSE cost indicators are each more than double the regional average P/E and P/BV ratios. In company news, Morocco’s largest bank, Attijariwafa, expanded further into Africa by acquiring leading Senegalese bank, Compagnie bancaire de l’Afrique de l’Ouest (CBAO).
Cairo SE: Hermes (1 month)
Current Year High: 103,313.60 Current Year Low: 67,011.50
Share values on the Cairo and Alexandria Exchanges contracted significantly in May 2008, as the close of the EFG Hermes Index at 92,331 points on May 22 represented a net loss of 9.8% when compared with the start of the month. While earlier downward fluctuations of CASE stocks were influenced by global markets, the negative movement last month was home made and incorporated the reactions of a surprised market to announced and rumored government action. Seeking to fund salary increases for cash-strapped public sector employees, the government revoked tax exemptions and fuel cost subsidies for energy-intensive corporations and started taxing profits from bonds and T-Bills. The stocks of large energy-intensive companies lost favor with investors due to the sudden loss of advantages; heavyweight Orascom Construction dropped 12.7% from May 1 to 22. The levy on bond returns sparked rumors that capital gains would also be taxed, to which investors responded by selling shares to take profits quickly. On the positive side, CASE authorities announced their intention to improve the bourse’s appeal by completing a campaign to banish hundreds of non-rule compliant companies before the end of 2008.
