JEDDAH, 14 April 2005 — The market capitalization of the Gulf Cooperation Council (GCC) region continued to climb with Saudi Arabia’s share nearing $400 billion mark at $392.99 billion at the end of March 2005.
UAE market capitalization breached the $100 billion mark to end the month at $127.68 billion. Qatar now seems to be challenging Kuwait for the No. 3 market in terms of market cap as it jumped to $91.1 billion in March as compared to $71.9 billion in the previous month, according to a report prepared by the Kuwait-based Global Investment House (GIH).
Strong corporate results, coupled with increased business and consumer confidence in the region are sending the markets and indices to their all-time high.
In March, the report said, the aggregate market depth remained heavily tilted toward the advancers as 256 stocks advanced and 144 stocks reported a monthly decline. Qatar stock market saw only 2 decliners out of the 30 stocks listed at DSM indicating a broad-based rally in the market. Oman and UAE bourses too witnessed high advance-decline ratio. Saudi stock market saw a flat advance-decline ratio but the market index reported a double-digit growth indicating that most of the buying has come in the index-heavy stocks. GCC markets surged in March as 5 out of 6 markets registered double-digit gains for the month. UAE led the regional market with a whopping monthly gain of 31.54 percent followed by Qatar which registered the monthly gain of 18.29 percent in March-2005. However, Qatar leads in terms of the YTD growth till 1Q 2005, registering a phenomenal 71.7 percent growth so far.
The food sector enjoyed the fastest pace of growth, mainly on account of extraordinary growth in the two UAE food stocks, Ras Al-Khaimah Poultry (+83.2 percent) and Abu Dhabi National Foodstuff Co. (+759.8 percent). This also comes despite falling profits in the Kuwaiti food sector and below average growth in most other markets.
The GIH report said that industrial companies across the region have also continued to improve on corporate profitability on robust economic growth and strong demand for industrial products across the board. Robust growth in the bottom line of Saudi Basic Industries Corp. (SABIC), the region’s largest industrial listed company, continues to drive overall growth. Qatari industrials have also added to the growth, growing at an aggregate of 117 percent.
The year 2004 proved to be a highly successful year for the UAE stock exchanges as the NBAD general index registered the highest gain amongst the regional peers. The index appreciated by 88.4 percent in 2004 to 8,482.04. It started the new year on a big bang by registering a massive gain of 50.6 percent in just three months of the year 2005, the GIH report said.
The number of IPOs which are lined up will further increase the depth and breadth of the GCC markets and investors have a much wider sectoral choice to diversify their portfolio of investments, the report added.