JEDDAH/DUBAI: Four of the seven Gulf markets fell yesterday, mirroring losses in global equities as investors fretted over the health of the world economy.
Saudi Arabia’s index was a major loser, taking its declines to 5.5 percent over the past three sessions, while the Qatar benchmark slumped to its largest one-day reverse for five weeks as blue chips on both markets were hammered. Abu Dhabi and Oman also fell, but Dubai and Kuwait rose, together with the little-traded Bahrain measure.
The Saudi index surged 48 percent between March 9 and May 23, with the Qatar and Kuwait benchmarks not far behind after rising 42 and 18 percent respectively over the same period.
These gains reflected rising investor confidence that the regional and global economies had bottomed out and were in line with similar rises in world equities as traders took on more risk.
This saw the safe-haven dollar fall and oil prices rise together with alternative currencies such as the euro and pound, but this trend is now waning amid gloomy outlooks from various economic sages including Nobel-Prize winning economist Paul Krugman and former Federal Reserve Chairman Alan Greenspan.
The Dubai index escaped yesterday’s gloom to post its third gain in four sessions. Shuaa Capital led the way with a 14.6 percent surge after the company said it was considering buying back a 1.5 billion dirham ($408.5 million) convertible bond. Dubai Financial Market climbed 6.6 percent.
In Saudi Arabia, the Tadawul All-Share Index (TASI) fell 2.42 percent to 5,7710.95 points, its largest one-day reverse for eight sessions.
Positive closes were seen in both the Media and Insurance sectors, with gains of 0.07 percent and1.14 percent respectively. Otherwise, all indexes saw losses ranging from 0.18 percent in Retail to a drop of 3.44 percent in the Building and Construction sector.
Liquidity has also taken a hit from recent levels, and came in at only SR7.9 billion. Overall market breadth was negative, with 23 advancers and 99 decliners giving an AD ratio of 0.23, the Jeddah-based Financial Transaction House (FTH) said.
“Technically, this wave of selling would continue to test lower support levels while having an eye on oil prices and international financial markets as a guide until the start of the second quarter earnings results,” the FTH said in its daily commentary about the stock market.
The Dubai stock index rose 1.2 percent to 1,730 points, its third rise in four sessions.
The benchmark Abu Dhabi index slipped 0.5 percent to 2,610 points, its fourth reverse in five.
The Kuwaiti index climbed 0.5 percent to a year-high of 7,922 points after its seventh advance in eight sessions.
The Omani index fell 1 percent to 5,498 points, its first decline in four sessions. The benchmark Qatari index slipped 2.9 percent to 6,545 points, its third straight loss and largest one-day fall for five weeks.
The Bahrain stock index rose 0.2 percent to 1,632 points.
Meanwhile, SHUAA Capital issued its second monthly GCC Investor Sentiment Report yesterday. The index has been designed to provide the global investment community with a benchmark of investor confidence for GCC countries and track changes in investor behavior over time.
Commenting on the findings, Oliver Schutzmann, chief communications officer of SHUAA Capital, said: “Saudi Arabia saw an increase in investor confidence in May with the Saudi Arabia Investor Confidence Index seeing a significant rise of 8.1 points, moving to 140.1 points from 132 points in April. This compares well to the GCC confidence index which saw a more modest increase of 2.7 points to 112 points from 109.3 points in April.”
He added: “Saudi Arabia is expected by investors to see further improvement in economic conditions over the next six months. Over 67.5 percent of the respondents signaled that they expected an improvement in economic conditions in the Kingdom, up by over 15 percent on last month. Just 7 percent of investors questioned, expect the Kingdom’s economy to be negatively affected.
“Of particular note is that 60.6 percent of the investors polled in May were calling the bottom of the cycle for the Saudi stock market. The DSM in Doha was the nearest with 40.8 percent of investors believing the worst was over. This makes for particularly encouraging reading for GCC stock exchanges given only 31 percent of investors are calling the bottom for the FTSE 100.”
Schutzmann said: “An overwhelming 60.6 percent of investors are calling a bottom for the Tadawul, while 21.1 percent are undecided and 12.7 percent remain bearish. For the Doha Stock Exchange 40.8 percent see the bottom, while 28.2 percent remain undecided and 21.1 percent have a negative view on the stock market. Positive signs are also evident for the Abu Dhabi Stock Exchange with 35.2 percent of investors calling a bottom. Although 43.7 percent are not calling a bottom for the Dubai Financial Market, the majority of investors are either undecided or positive.
— With input from agencies
