PHOTO
DUBAI- Middle Eastern stock markets far underperformed the rest of the world in 2017 but as the year ended, beaten-down valuations for shares and plans for higher government spending gave investors reason to expect a better 2018.
Egypt's stock index
.EGX30
surged 21.7 percent in 2017 as economic reforms bore fruit, but the picture in the Gulf was little short of disastrous because of geopolitical tensions, sluggish economic growth and sagging real estate prices.
Saudi Arabia's index
.TASI
edged up just 0.2 percent during the year compared to a 34 percent leap for MSCI's emerging markets index
.MSCIEF
. Among other major Gulf markets, Dubai
.DFMGI
fell 4.6 percent and Qatar
.QSI
, hit by a boycott imposed by other Arab states, lost 18.3 percent.
The new year looks unlikely to be as poor in the Gulf, however, partly because many share valuations have been beaten down to stand in line with, or even below, other emerging markets.
Also, a rise of oil prices in the last few months has let Gulf Cooperation Council governments slow austerity drives that have slashed economic growth and damaged corporate earnings. Growth is widely projected to pick up moderately in 2018.
"With this backdrop and underpinned by undemanding valuations, we are generally optimistic on the GCC for the year 2018, with the outlook ranging from slightly negative to moderately bullish across the board," said Bader al-Ghanim, head of GCC asset management at Kuwait's Global Investment House.
A Reuters poll of 13 leading Middle Eastern asset managers, released on Sunday, found 54 percent expect to raise allocations to regional equities over the next three months and none to cut them, the most positive balance since August
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.
Saudi Arabia's index
.TASI
edged down 0.1 percent on Sunday as real estate developer Dar Al Arkan
4300.SE
, the most heavily traded stock, sank 5.0 percent despite saying it would offer 30 percent of Dar Al Arkan Properties, a property management firm with assets of 2.68 billion riyals ($715 million), to the public. It did not specify a date.
The stock had more than doubled in the past three months, partly in anticipation of the IPO.
National Commercial Bank
1180.SE
, the biggest bank, climbed 2.7 percent in active trade. Its board proposed increasing the bank's capital by 10 billion riyals to 30 billion riyals by issuing bonus shares funded from retained earnings.
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Qatar's index
.QSI
edged down 0.03 percent on Sunday as the biggest lender, Qatar National Bank
QNBK.QA
, slipped 0.8 per cent.
The year's final day of trade for markets in Dubai, Abu Dhabi and Kuwait was Thursday.
HIGHLIGHTS
SAUDI ARABIA
* The index
.TASI
edged down 0.1 percent to 7,226 points.
QATAR
* The index
.QSI
edged down 0.03 percent to 8,523 points.
EGYPT
* The index
.EGX30
edged up 0.01 percent to 15,019 points.
BAHRAIN
* The index
.BAX
surged 2.0 percent to 1,332 points.
OMAN
* The index
.MSI
added 1.0 percent to 5,099 points.
(Editing by Larry King) ((andrew.torchia@thomsonreuters.com)(+9715 6681 7277)(Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))
Egypt's stock index
Saudi Arabia's index
The new year looks unlikely to be as poor in the Gulf, however, partly because many share valuations have been beaten down to stand in line with, or even below, other emerging markets.
Also, a rise of oil prices in the last few months has let Gulf Cooperation Council governments slow austerity drives that have slashed economic growth and damaged corporate earnings. Growth is widely projected to pick up moderately in 2018.
"With this backdrop and underpinned by undemanding valuations, we are generally optimistic on the GCC for the year 2018, with the outlook ranging from slightly negative to moderately bullish across the board," said Bader al-Ghanim, head of GCC asset management at Kuwait's Global Investment House.
A Reuters poll of 13 leading Middle Eastern asset managers, released on Sunday, found 54 percent expect to raise allocations to regional equities over the next three months and none to cut them, the most positive balance since August
Saudi Arabia's index
The stock had more than doubled in the past three months, partly in anticipation of the IPO.
National Commercial Bank
Qatar's index
The year's final day of trade for markets in Dubai, Abu Dhabi and Kuwait was Thursday.
HIGHLIGHTS
SAUDI ARABIA
* The index
QATAR
* The index
EGYPT
* The index
BAHRAIN
* The index
OMAN
* The index
(Editing by Larry King) ((andrew.torchia@thomsonreuters.com)(+9715 6681 7277)(Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))