Beirut SE: Shuaa (1 month)
Current Year High: 3,470.63 Current Year Low: 1,761.53
The Blom Stock Index for the Beirut Stock Exchange closed the July 25 session at 2013.55 points, down some 38 points when compared with the last close in the previous month. After climbing to a peak of near $40 per share on July 7 in reflection of a 10% dividend that will be paid out starting end of August, shares of real estate firm Solidere traded lower ex-dividend and closed at $36.01 on July 25. As politicians seemed to get something right in their negotiations in the second week of the month, the economically hopeful formation of a new cabinet drove the BSI to a new record high of 2,119 points. There was a bit of a hangover caused by renewed and probably incessant political squabbles later in the month but on the balance, July underscored that political improvements are the key in unlocking economic growth potentials for listed stocks and the whole economy. The central bank announced that reserves reached $15.5 billion in mid-July; a new sovereign bond issue was under preparation with the help of local and international banks as a $399 million bond neared its date of maturing on August 6.
Amman SE (1 month)
Current Year High: 5,043.72 Current Year Low: 3,003.07
Share price trends on the Amman Stock Exchange broadly pointed sideways in the review period. After shedding some points early in the month, the ASE general index fluctuated between 4,500 and 4,700 points and closed the July 24 session at 4,711.36 points. This volatility in the general index was influenced largely by fluctuations in industrial stocks. These fluctuations in turn were attributed mostly to plans for introduction of a capital gains tax, which were withdrawn by tax authorities in mid July. The industry index, the main force in upward movements on the ASE in 2008, underperformed the market in July but ended the period at par with the general index. Insurance and services trailed the general index throughout the month while the banking sector displayed the best performance and gained 4.2%.
Abu Dhabi SM (1 month)
Current Year High: 5,148.49 Current Year Low: 3,327.86
The Abu Dhabi General Index clung to the 5,000 points mark as the summer’s trends for booking profits and investing in individual relaxation made their impact. With a close at 5,005.70 points on July 24, the ADX index recorded a small gain that month because the exchange had a positive week at the end of the review period, after three weeks of losses. Sector indices did not report much that was worth writing home about. Energy was buoyant and real estate and telecoms also were positive on the month while banking was very close to the general index. The insurance, consumer, construction, and industrial sub-indices dropped between 0.85% and 2.53%, underperforming the general index. Real estate and energy led the gains in the last week of the review period.
Dubai FM (1 month)
Current Year High: 6,291.87 Current Year Low: 3,968.09
Owing to a 215-point uptrend in the latter part of the period, the Dubai Financial Market’s general index had one nostril above water on July 24. The index closed at 5,437.54 points, 0.1% up from the start of the month. July thus did not alleviate the DFM’s standing in the regional performance tables for 2008; with a drop of 8.34% year-to-date, the DFM is still the second-worst performer this year in the GCC after the Saudi bourse. The sub-indices broadly confirm the downtrend: most sectors were flat or slightly negative throughout July; compared with the start of January, the transport, real estate, telecoms and utilities sector indices are down between 15 and 30%. Only the indices for insurance and materials bucked the trend and moved in positive territory with year-to-date gains of 6.4 and 13.5%, respectively. On the other extreme, however, stocks in the consumer staples category plummeted by more than 39% in July. The small sector lost half its value since the start of 2008. Jeema Mineral Water Co, which had listed earlier this year, shed 50% of its share price between June 18 and July 24.
Kuwait SE (1 month)
Current Year High: 15,654.80 Current Year Low: 12,039.00
The Kuwait Stock Exchange had the highest index losses of any GCC bourse in July, closing at 14,887.80 points on July 24, down 3.7% from the start of the month. Pundits associated the slide, which had set in after the index reached a historic high above 15,650 points on June 24, with investor worries over potential attacks on Iran as the US and Israel deployed the verbal sledgehammer in their criticism of the ayatollahs’ nuclear theocracy. While all major sectors on the KSE weakened between June 24 and July 25, index losses during this particular period were the highest for industry (9.5%), followed by services (4.85%). The banking and insurance sub-indices, on the other hand, lost between 3% and 2% and suffered the least. When analyzing July share price movements alone, however, insurance and industry dropped between 5 and 6%, more than other sectors. Despite its loss in July, the KSE general index is still quite the looker for 2008 to date with a gain of 18.5% since January 1.
Saudi Arabia SE (1 month)
Current Year High: 11,895.47 Current Year Low: 7,506.45
The Tadawul Index on the Saudi Stock Exchange dipped down to 8,706 points on July 16, its lowest reading since October 2007. The SSE recovered to a close at 9,080.87 points in its July 23 session, signifying a 2.9% drop in the opening period of the year’s second half and certainly not enough to change the SSE’s situation as the most underperforming Middle Eastern securities market this year. Three sub-indices out of 15 in the SSE showed gains in the review period, namely telecommunications, retail, and industrial investments. All three major telecommunications companies, Etisalat Etihad, Zain Saudi, and STC, made gains toward the end of the review period but STC advanced the most, lifting away from a 12-months low recorded on July 16 on news of a good outlook for the Saudi telecommunications industry. Among debutants, Alinma Bank continued trading lower in the second month of its life on SSE.
Muscat SM (1 month)
Current Year High: 12,109.10 Current Year Low: 6,423.95
The Muscat market was not to be caught by its GCC peers in July. The Muscat Securities Market general index closed the review period up 2% at 11,544.61 points on July 23 ahead of a long national holiday weekend. While the month did not see trading reach exhilarating levels, the MSM performance ahead of the other GCC bourses secured the Omani bourse’s claim to being the strongest gainer in 2008 at being up almost 28% when compared with the start of the year. Banking stocks struggled in the review period relative to other sectors; the banking sub-index closed 1.14% lower on July 23 when compared with the beginning of July. Industrial stocks, which had frequently served as drivers of the market gains in the first half of 2008, stayed married to the general index, leaving it to the services sector to outperform the general index with a gain of 4.2% on the month. The shares of Omantel were among the most watched during the month as the stock drew attention from buyers on announcements that the government plans to sell another major chunk of its 70% stake.
Bahrain SE (1 month)
Current Year High: 2,902.68 Current Year Low: 2,495.28
Stocks on the Bahraini bourse moved generally lower in July as the Bahrain Stock Exchange extended its losing streak into a second month. The general index closed at 2819.58 points on July 24, down 1.4% on the month and up 2.3% on the year. The sub-index for hotel and tourism companies, already the best performer among the BSE sector indices in the first half of 2008, continued to stay ahead of the market and added 3.7% in the July review period. Banking, insurance, services, and investments on the other hand moved lower last month; the investments sector gave up 2.4% and underperformed the general index the most, by a full percentage point. Al Khaleej Development Co, the BSE’s best performer this year so far, made further modest gains while the sharp slide of Arab Banking Corporation – the year’s hardest hit stock in Bahrain – appeared to be tapering out into a more stable picture (but one of a negative price to earnings ratio).
Doha SM: Qatar (1 month)
Current Year High: 12,627.32 Current Year Low: 7,340.06
The Doha Securities Market’s general index slipped in July but switched to a sideways pattern in the second part of the month. The market closed at 11,851.02 points on July 24, representing a drop of 0.7% on the month and a retreat by 845 points from its year high on June 11. Banking stocks shadowed the general index in their July trend whereas industrial and insurance values outperformed the index, adding 3.9 and 2.8%, respectively. The services sector underperformed with a drop of 4%. Reporting a price to earnings ratio of 19.89x, the DSM is the most expensive market in the GCC, though, and it serves to remember that the bourse is up over 50% when compared with a year ago. In the real estate sector, Barwa Real Estate, whose share price fluctuated in the upper 80s (Riyals) in July, tops most DSM traded stocks in terms of the P/E ratio, at 43.81x. However, 2008 newcomer Ezdan, also a real estate player, displays an even higher P/E of astounding 67.03x.
Tunis SE (1 month)
Current Year High: 3,059.63 Current Year Low: 2,436.94
The Tunis Stock Exchange had a month that ended better than it started. Dropping some 75 points in the first ten days of July, the Tunindex gained most back and closed the July 24 session at 3020.55 points. Investors on the TSE got some exciting news in July as agro, manufacturing, and real estate conglomerate Poulina Group Holding (PGH) announced plans to list 10% of its capital via a capital increase on the exchange in what PGH touted as the largest initial public offering in the TSE’s history. PGH, which has 71 subsidiaries, moreover said it will be the bourse’s new market cap leader after the flotation; subscription in the IPO was opened in roughly equal proportions to local investors and foreign institutional investors and was scheduled to run from July 24 to August 6. In other market news, the Tunisian government was reported to be planning to sell a 35% stake in listed insurance company STAR to the French insurer Groupama.
Casablanca SE All Shares (1 month)
Current Year High: 14,925.99 Current Year Low: 11,394.32
The Casablanca Stock Exchange index added 272 points between July 1 and its close at 14,463.40 points on July 25. Up 13.93% since the start of 2008, the Moroccan bourse remains at the top of the price ladder for all stock exchanges in the Middle East and North Africa, with a proud price to earnings ratio of 32.75x. Market cap leader Maroc Telecom traded sideways in July; however, the company announced 10% higher net profits in the first half of 2008 when compared with the same period in 2007. The company attributed the profit increase firstly to revenue growth at its domestic mobile communications division.
Egypt CASE (1 month)
Current Year High: 11,935.67 Current Year Low: 7,517.77
Although it had a couple of positive sessions in mid-month, the Cairo & Alexandria Stock Exchanges could not come to a liftoff in July. The CASE 30 index closed at 9382.51 points on July 24, down 4.5% from the start of July. Market capitalization leader Orascom Construction Industries had a volatile time but showed a net gain of EGP 20 the share on the month to close at EGP 387.55 on July 24. The second largest company on CASE by market cap, Orascom Telecom Holding was less fortunate and saw its shares lose 14.9% in value between July 1 and 24. OTH additionally received a valuation rebuff from international investment bank Morgan Stanley; the bank’s analysts reportedly lowered their target price for OTH by more than 25%, citing the company’s uncertainty over strategy and vulnerability to inflation. OTH, OCI, and Orascom Hotels & Development, the third large firm in the family, each lost between 30 and 40% of their value since the start of 2008. Showing few positive examples of companies that currently enjoy trust of investors, the market is still looking for its new champions.
