GulfBase GCC Cap Indices
Large Cap4,023 0.80
Med Cap3,850 0.49
Small Cap4,907 0.91
Micro Cap8,519 0.62

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Ticker Price Volume
GFH 0.46 3,578,848
QNBK 135.9 109,396
SABIC 98.06 2,513,945
DSI 0.39 45,711,538
AMLAK 1.09 12,534,009
AIRARABIA 1.12 4,055,524
EEC 18.03 354,774

GCC Economic Monthly

Source: NCB Capital

L, U, V … or W?


The relative stabilization of the global economy and financial markets over the past half a year has fed a gradual improvement in confidence. The consensus view now effectively rules out a sharp relapse in economic conditions, even if such an eventuality cannot be completely dismissed. This improved sentiment has shifted the focus of observers to the way forward. Stabilization does not automatically entail a recovery and the key question regarding the performance of the global economy has to do with the speed and sustainability of the climb back from the recession. Even as the inventory cycle has clearly turned, risks remain elevated in the financial sector; at the same time, many key economic variables — notably unemployment — can be expected to continue to deteriorate for some time. The alphabet soup of the current economic debate reflects the wide range of possible outcomes in the face of these conflicting forces.

• At over twenty months and running, the current recession has been among the longest economic downturns on record, next only to the 1930s. While it shares several common elements with earlier recessions, especially in the build-up of asset bubbles against the backdrop of easy credit, the scale of the financial system meltdown, its global spread and the speed of its development have all contributed to its unusual severity

• With the challenges unprecedented, the policy response to this crisis has also been extraordinary; moreover, it constituted a marked departure from the experience of the 1930s. Substantial stimulus packages, unconventional monetary policies and global coordination have all contributed to bringing the crisis under control to a point where signs of recovery are now visible. Even as some countries in the Euro zone appear to be coming out of the recession, there are indications that some emerging economies, especially in Asia, are leading the way in global recovery

• A key risk concerning the impending recovery is linked to the exceptional nature and scale of the government stimulus measures, which will inevitably be limited in duration. By contrast, consumer spending and private investments may prove slow to pick up as the inevitable financial de-leveraging and risk aversion continue to favor thrift and deter people from long-term expenditure commitments. The near-term trajectory for the global economy will therefore depend critically on the duration of the impact of the various stimulus measures as well as on the pace and nature in which they are ultimately phased out

• Economic recovery in the GCC region depends a great deal on the revival of economic activities in the industrialized and emerging nations, not least because of the impact their prospects will have on the all-important oil price. While policymakers have made impressive efforts to promote consumer spending, confidence remains fragile, not least because of the persistent troubles of Dubai and concerns over the financial health of parts of the corporate section in view of recent revelations. These problems have in turn delayed recovery in the credit and equity markets

• Following a rally in July, global equity markets stagnated in August. The advanced G7 markets returned numbers ranging 0.8–9.0% while the emerging economies yielded -21.8– 9.2%. Among GCC indices, Oman’s Muscat Securities Market was the top performer gaining 8.5% during August

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