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Jan 09 2012

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Global Investment House "Global": GCC Markets Performance - FY2011

On the negative side, Bahrain Bourse posted the steepest decline amongst its GCC peers, down by 20.15 percent for the year. The kingdom's economy is estimated to have lost up to USD2bn due to political unrest that hit Bahrain in 1Q2011. All sectoral indices ended the year 2011 on a negative note, with only a handful of stocks ending the year with gains.

In Kuwait, Global General Index ended with a 19.78 percent YoY decline, with all sectoral indices ending the year on a negative note. Global Investment Sector Index posted the steepest decline, shedding 30.39 percent of its value in 2011. The services sector index followed with a 29.51 percent decline on the back of the notable retreat of several services stocks, including heavyweight Zain which lost around 31.8 percent of its share value.

In the meantime, the performance of Saudi stocks has seen some improvement during 4Q2011, thanks to the distribution of good dividend by listed corporations. Tadawul All Share index appreciated by 5.0 percent QoQ by the end of 4Q2011, which brought down the index's loss to 3.07 percent in 2011. Despite its negative performance, which was mainly due to external factors such as worries over international markets and the economic situation around the world, the Saudi market managed to end the year with marginal loss, compared to large declines of other GCC stock exchanges.

Market Capitalization

Market capitalization for the GCC markets stood at USD697.4bn (adjusted for cross listed companies) by the end of December 2011, down by 7.1 percent compared to end of year 2010. The Saudi market constituted 48.6 percent of the aggregate market capitalization of GCC stock markets.

Market Breadth

The breadth of the GCC markets was titled towards decliners during FY2011, with 402 stocks ending on a lower note compared to 220 advancing stocks, while 69 stocks remained unchanged.

The market spread was negative in five out of the six GCC markets; except in Saudi, which was the only market that had a positive advancers to decliners' ratio.

GCC Trading Activity

Total volume of shares traded during FY2011 stood at 133.8bn shares, which was 21 percent lower than aggregate traded volume in FY2010. In the meantime, value of shares traded increased from USD296.7bn in FY2010 to USD356.1bn in FY2011, up by 20 percent.