KUWAIT, 21 March 2004 — After months of accelerating prices, GCC equities seem to have lost some steam during February, but broadly speaking, GCC markets were up across the board. Gains varied widely though, as Kuwait and Bahrain both entered choppy territory and posted modest gains of less than 0.5 percent while Qatar registered spectacular gains. Saudi Arabia also achieved a commendable gain followed by both UAE and Oman.
Although February saw all the exchanges record gains, the markets were not able to mirror the vigorous trading activity which took place in the last few months. This in part can be attributed to limited trading because of the Eid Al Adha and other holidays, but investor interest was mostly elsewhere during the month, as depicted by the retreat in average daily volumes in 5 of the 6 regional markets, with Qatar being the exception.
Average value traded during the month wasn’t as clear cut as volumes, with Qatar, Saudi Arabia and Kuwait scraping higher averages. The optimistic atmosphere in the region remained strong as a result of unexpected events on the world oil market.
Dividends as well as bonus issues were the flavor of the month throughout the GCC capital markets. The story of earnings growth was similar across the GCC region as by the end of February, a large number of companies had already announced their 2003 results. The earnings of those companies have shown healthy profit growth in 2003. Another bout of strong growth in net profits will undoubtedly advance the regional markets further and set off another broad based rally.
After tailing positive gainers during January, strong investor interest at the Doha Securities Market pushed the index up 14.88 percent to hit new life highs. The superb performance rendered Qatar as the leader for February and placed it well ahead of its counterparts in gains thus far in 2004. Saudi Arabia also had a progressive month, adding 4.99 percent during the month to post YTD gains of 8.46 percent. UAE also posted gains of 2.24 percent during the month and YTD gains of 7.23 percent. Oman, last month’s leader, although losing the foothold to Qatar remained in a regional second place, climbing 1.58 percent during February to register a YTD growth of 8.52 percent. Kuwait and Bahrain posted minor gains, with Bahrain remaining the only exchange to be in negative territory after two months into the new year.
Although all 6 markets made positive gains during February, the aggregate volumes traded in the GCC region fell by 48 percent to 3.22 billion shares as compared to 6.18 billion shares traded in January. Similarly, the value of trades in the region dropped by 13 percent to $23.85 billion as compared to $274.29 billion recorded in January.
In the region, gainers continued to outpace decliners, although the difference between the two fell to 77 in favor of advancers, substantially down from January’s difference of 151. Five of the six regional markets were able to produce more gainers than decliners, with Kuwait being the sole exception. The region saw 198 shares recording some level of improvement during the month while 121 stocks, 57 of which were in Kuwait, registering losses in their share value. Another 127 stocks remained unchanged during the month, again mainly from Oman and Bahrain.
The general rise in share prices across the region helped the aggregate market cap of the GCC exchanges reach $326.9 billion as compared to $313.2 billion at the end of January, representing a 4.4 percent increase.
