GulfBase GCC Cap Indices
IndexLevelChg%
Large Cap4,036 -0.08
Med Cap3,814 0.03
Small Cap4,859 0.05
Micro Cap8,126 -0.17

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Ticker Price Volume
QNBK 127 470,450
ETISALAT 17.2 1,101,899
GFH 0.59 99,270
EMIRATESNBD 7.96 235,332
DAMAC 3.06 2,229,322
MASQ 69
SABIC 102.33 6,566,984

Projecting a V shaped recovery

Source: Deutsche Bank

We expect Saudi Arabia to be one of the fastest countries in the region to return to pre-crisis growth rates with a V shaped recovery likely.

The USD10/b upward revision to our oil price baseline for next year and a further uptick in our global growth forecasts are both positive. We have upgraded our 2010 C/A forecast for Saudi Arabia to 10.5% of GDP from 2.6% previously and also revise up both nominal and real GDP forecast for 2010.

That net credit extension has been positive for the past three months should also be an important support to growth and we note that we need only to see a reduction in the pace of deleveraging to boost domestic demand.

Fiscal policy should also be a significant support to growth with Saudi Arabia’s planned fiscal response the largest in the G20. Monetary policy should also remain accommodative with rates expected to remain low for an extended period.

Any failure to resolve the troubles at Saad/Algosaibi does however risk prolonging risk aversion and could mean the V shaped recovery falls flat.

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