GCC equity markets rose by more than 20 per cent in the first four months of 2014 to $1.14tn, according to a report issued today by the National Bank of Kuwait (NBK).
“By the end of April, the region had outperformed international markets with the S&P GCC index up 16 per cent year-to-date (ytd) compared to developed and emerging market indices,” NBK said.
“The outlook for the GCC economies remained favorable especially when compared to emerging markets that continue to show signs of weakness,” NBK said. “At the same time, GCC fiscal positions continue to be supported by high oil prices, providing steady financing to development spending.”
NBK said that additional support has come from corporate sector profitability, which picked up and is expected to continue to improve.
“Regional markets have also benefited from the decision by MSCI to upgrade the UAE and Qatar to emerging market status from frontier markets, effective in May,” NBK said. “The move, which could lead to a further inflow of institutional funds, has already boosted those two markets considerably. In addition, markets in the UAE and Qatar continued to benefit from improved outlooks as the countries geared-up to host the Expo 2020 and 2022 FIFA World Cup, respectively.”
The Dubai Financial Market (DFM) rose by 52 per cent in January-April. Qatar Exchange (QE) rose by 24 per cent in the same period. The Oman stock market was the only GCC bourse to decline in this period.
“GCC daily traded volumes averaged $3 billion, up 50 per cent from December’s average,” NBK said. “The rise in volumes was particularly significant in UAE and Qatar as fresh liquidity entered these markets in anticipation of the MSCI upgrade.”
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