Jan 06 2007 |
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Negative Trend in GCC Stock Markets Partially Reverses
DUBAI, 6 January 2007 -- The negative trend in GCC markets, set in October and accelerating in November, was partially reversed in December as five of the six GCC markets ended the month higher with the performance of the Qatari market being the most noteworthy as it ended up almost 20 percent higher, according to a Middle East market review from Dubai-based Rasmala Investment .North African markets continued to impress with Egypt and Morocco registering a growth of around six percent and four percent, respectively. The Jordanian market recovered some of its large losses toward the end of the period and ended the month slightly lower.
The largest market, Saudi Arabia, was lower over the month as trading volumes were markedly lower due to the onset of the Eid holiday and persistently poor sentiment. The decline was broad-based across all sectors with the industrial sector performing relatively well and ending the month unchanged. This was primarily due to market heavy weight Saudi Basic Industries Corporation (SABIC) which was around 10 percent higher at one point before profit-taking erased the earlier gains leaving it only slightly higher for the month. The banking sector was boosted by a powerful rally in Samba Financial group on the last two days of trading but nevertheless ended the month lower.
In corporate news, Saudi Cable Company announced that it won a $123 million contract from Qatar General Electricity . The Savola group , one of Saudi Arabia's leading industrial companies, said that it would invest more than $500 million in real estate in the Kingdom and the Saudi Arabian Fertilizer Company announced a proposal to distribute $160 million in cash dividends.
Valuations in the Saudi market continue to come down to reasonable levels versus other regional and international markets and we await a more sustained recovery pending a positive set of 4th quarter 2006 results which may be the catalyst to an improved market sentiment.
The UAE markets posted decent gains in December. The first two weeks saw a marked increase in trading volumes as the market absorbed the liquidity returning from the DFM IPO. This improved tone proved to be somewhat short-lived as profit taking reversed some of the earlier gains made in the first half of the month.
© Arab News 2007
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