JEDDAH, 6 December 2004 — The Shuaa Capital Arab Bond Index recorded a 0.28 percent increase in November despite US Treasury losing ground on the back of a slowing American economy and weak dollar. The tightening of emerging markets’ credit spreads offset losses leading to the positive performance by the index. The SC Composite Index posted gains of 11.69 percent to end the month at an all-time high, following gains recorded throughout the MENA region with the SC Levant and SC North Africa indices gaining 16.32 percent and 5.14 percent respectively.
The largest composite constituent by market cap, the SC GCC Index, recorded a 12.03 percent gain as most Gulf markets, with the exception of Bahrain and Oman, recorded gains of over 5 percent.
The SC UAE Index recorded the greatest gains of 17.54 percent as a broad based rally prevailed in the market toward the second half of the month with large caps such as Etisalat and Emaar Properties closing up 22.94 percent and 31.16 percent respectively.
The SC Saudi Arabia Index recorded the second largest GCC gains of 13.26 percent as positive investor sentiment over FY 04 earnings drove the markets to record highs of 3,707.54 toward the end of the month. The SC Qatar Index recorded a 9.11 percent gain following stagnant monthly performances prior to November. Increased activity resulted in a strong industrial, banking and telecom sector gains and the largest traded value activity since May.
Walid Shihabi, head of research at Shuaa Capital, said, “The overall FY 04 corporate performance has revealed itself through 9-month 04 earnings announcements and investors have adjusted their views accordingly, taking positions in line with full year expectations.
Overall, supportive macroeconomic growth coupled with expansions on a regional scale has further fueled growth in GCC equities. Liberalization in the GCC telecom sector was a positive step toward adding depth to regional capital markets and the trend seems to indicate that regional governments are eyeing the possibility of more liberalized capital markets. Qatar has announced that it will allow for foreign investments in all equities some time early in 2005, which may bode well for liquidity on the exchange.
Established in 1979, Shuaa Capital is today a leading financial investment company licensed by the UAE central bank and offers a broad range of financial services and products. These include underwriting of securities and other corporate finance activities, investment advisory services, fund and portfolio management, and brokerage of local, regional, and international securities. Recently, Shuaa Capital emphasized the opportunities available within the GCC markets and established individual funds for different classes of assets. Funds managed by Shuaa Capital today include: MENAVEST, Arab Gateway Fund Ltd., Al-Thiqa Emirates Equity Fund, The Arab Income Fund Ltd. ‘TAIF’, Oman Gateway Fund Ltd. and Al-Mahfatha Qatari Investment Portfolio.