| 08 Sep 2010 |
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GCC governments poorer by $118bn
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Government-owned entities (GOEs) hold stakes aggregating $182 billion in listed firms on the local bourses, accounting for 29 per cent of the total market capitalisation, a new report by Kuwait Financial CentreKuwait Financial Centre
(MarkazMarkaz) shows."In April 2008, we researched the reach of GOEs in the stock market.
Back then, they accounted for 27 per cent of the stock market holding (as measured by market capitalisation) valued at $300bn," M.R. Raghu, MarkazMarkaz's head of research, writes in the report.
"A recent visit to the issue point out that they now hold more or less the same share (29 per cent) though their value has come down significantly to $182b," he says.
That amounts to an aggregate loss of $118bn by the GOEs assuming that no new investments were made by these entities and they did not exit any existing ones.
According to the report titled The Golden Portfolio, governments across the GCC are dominant players in the region and hence major stakeholders in local markets. "Our research reveals that there are 51 GOEs in the region that hold 29 per cent of GCC market capitalisation spread over 179 listed companies," it says.
The Saudi Arabian Basic Industries Corporation (SABIC) tops the golden portfolio with a GOE holding worth $47.32bn, or 70 per cent of the listed company. Saudi Telecom Company, another of the Kingdom's listed gems, comes second with three GOEs holding a combined share worth $16.4bn, or 84 per cent of the company.
The UAE's Etisalat is No. 3 on MarkazMarkaz
's golden portfolio, with a GOE holding worth $13.34bn, or 60 per cent of the company. National Bank of Abu Dhabi (No. 9), with a GOE investment worth $5.12bn, or 70 per cent f the bank, is the other UAE firm among the top 10 in the golden portfolio while Emirates NBD (No. 18), Emaar Properties (No. 19) and Abu Dhabi Commercial Bank (No. 22) are the other UAE representatives among the 25 listed firms that comprise the golden portfolio.Saudi GOEs have the largest share of 60 per cent among GCC GOEs, followed by UAE (16 per cent) and Qatar (14 per cent). "Given the size of Kuwait market, the share at 6 per cent seems to be low. In terms of penetration, Saudi Arabia dominates with a 35 per cent penetration followed by UAE and Qatar. Kuwait has the lowest penetration at 13 per cent," the report states.
Four of the top ten GOEs are from Saudi Arabia, with the Kingdom's Public Investment Fund topping the GOE charts with aggregate investments in listed firms worth $71.9bn. General Organisation for Social Insurance - Saudi Arabia is second with investments aggregating to $17.8bn, followed by the UAE's Emirates Investment Authority, with aggregate investments worth $13.4bn.
Ten GOEs in the UAE hold stakes aggregating to more than $28 billion of listed firms in the country, accounting for 29 per cent of the total market capitalisation.
Emirates Investment Authority is the top UAE GOE accounting for 47 per cent of the total shares valued at over $13bn across two listed companies (Etisalat and Deyaar Development Company).
By Vicky Kapur
© Emirates 24|7 2010
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