| 07 Sep 2010 |
|
Investors Shy Away, Regionally and Globally
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But local markets outperformed international markets throughout August
Global news supporting this viewpoint included reports of a deceleration of China's economic activity, the Bank of England's downgrade of the U.K.'s growth outlook and weak U.S. housing data. On a regional level, the overlap of Ramadan and summer combined with a lack of catalysts lead to the lowest volumes in several years for some of the local markets.
MENA markets outperformed international equity markets despite both indices ending lower on the month. The MSCI Arabian Markets Index lost 0.5% compared to a drop of 3.9% for international markets as measured by the MSCI World Index. On a YTD basis, the region continues to fare better than international markets up 1.5% compared to a YTD decline of 7.5% for international markets.
United Arab Emirates
Indices reversed last month's positive trends as both the DFM and ADX lost 1.9% on the month, on a YTD basis, the DFM and ADX are still 17.7% and 8.9% in the red, respectively.
In the real estate sector Emaar, sold a commercial property for AED 331.7mn and incurred a loss of AED 38.5mn from the sale of Hamptons Group's operations in Europe, U.K. and Asia to Countrywide. The stock ended the month flat.
The issuer rating for Aldar Properties was downgraded by Moody's to Ba3 from Ba1 and the stock dropped 8.9%.
In the financial sector, Emirates NBD raised USD 221mn from the Middle East's first issue of securities backed by auto loans. The stock lost 2.8% in August. Dubai Islamic Bank led the losses, dropping 5.1% and its Q2 net profit dropped 33.1% from a year earlier to AED 301mn.
In telecoms, Du posted a Q2 net profit of AED 137.4mn compared with AED 57.6mn in the year-earlier period. The stock gained 2.5% on the month. Meanwhile, ADX heavyweight, Etisalat, lost 1.0% in August.
Saudi Arabia
The Tadawul Index lost 2.8% in August after gaining 3.1% in July. On a YTD basis, the index is now down 0.3%.
Saudi Arabia's July M1 money supply rose 20.6% compared to last year while July M2 money rose 5.1%.
Saudi Arabia approved a five-year SAR 1.44 trillion development plan that includes human resources, education, housing and transportation infrastructure.
Non-oil June exports gained 22% to SAR 10.7bn.
Kuwait
The KSE Index finished the month up 0.5%. The index is still 4.5% in the red since the beginning of the year.
Kuwait's central bank sold KWD 100mn 1-year treasury bonds with a coupon rate of 1.25%.
Moody's upgraded the outlook on Kuwait's Aa2 sovereign ratings to stable from negative.
Kuwait recorded a budget surplus of KWD 6.44bn in the fiscal year that ended March 31 after oil revenue was more than double the forecast.
Kuwait's inflation rate rose to 2.9% in May compared to 2.8% in April.
Qatar
The DSM 20 Index continued to be the top performer among the GCC indices, rising another 2.8% to reach a three-month high and bringing the year-to-date gain to 3.8%.
The Qatari Central Bank cut the overnight deposit rate by 50 basis points to 1.5%.
Qatar consumer prices fell 2.9% in July compared to a year earlier and 0.5% compared to June. It was the seventh consecutive month of falling consumer prices due to lower housing and fuel costs.
Oman
The MSM Index reversed last month's upward trend losing 0.6% in August and is 1.8% in the red on a YTD basis.
Oman Central Bank sold OMR 200mn 0.11% 1-month certificates of deposit.
Oman's June oil output fell to 25.3mn barrels of oil compared to 27.18mn barrels of oil in May.
Oman's June M1 money supply increased 13.8% from 10.9% in May while M2 money supply grew 8% in June from 6.2% in May.
Egypt
The EGX gained for a second consecutive month, up 1.5% in August. On a YTD basis, the index is 3.2% in the green.
Suez Canal revenue rose to USD 406.2mn in July, up 6.1% from a year earlier.
The World Bank will lend Egypt USD 3.2bn as financing for 18 economic development projects.
-Ends-
About Rasmala Investment Bank Limited
Rasmala Investment Bank Limited is a leading regional Investment Banking Group with offices in the UAE, Saudi Arabia, Oman and Egypt. Rasmala Holdings Ltd has USD 1.3 billion in assets under management and its core business activities include Corporate Finance, Asset Management, Brokerage and Private Equity.
Media Inquiries:
Claire Cummins, Senior Communications Officer
claire.cummins@rasmala.com
Tel: +971 4 363 5600
Susie Pagan, Hill and Knowlton
Account Director
susie.pagan@hillandknowlton.com
Tel: +971 50 550 7520
© Press Release 2010
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