GCC markets fall 2.91 per cent in June

GCC markets were down in June, losing 2.91 per cent after a decrease of 6.1 per cent in May, the Kuwait Financial Centre (Markaz) revealed yesterday.

All GCC markets except Abu Dhabi were in the red. Saudi (TASI) was the largest loser shedding 3.80 per cent for the month, followed by Qatar which lost 3.49 per cent. Dubai has been the best performing market YTD, with a gain of 7.28 per cent. Kuwait lost 0.60 per cent in June while Bahrain and Oman both lost 1.13 per cent, said Markaz in its monthly analysis of GCC bourses.

News in the region included:

n A study done by Dubai Chamber of Commerce and Industry (DCCI) combines the latest IMF data, with the data from national authorities. It indicates that the GCC as a whole will record a year on year growth of 5.4 per cent in 2012.

n Fitch Ratings has affirmed SABIC long-term Issuer Default Rating (IDR) at ‘A+’, senior unsecured rating at ‘A+’ and Short-term IDR at ‘F1’. The Outlook on the Long-term IDR is Stable.

n According to the latest IMF article IV report on Kuwait, Government expenditure continued to increase in FY 2011/12 by 8 per cent, reflecting a significant increase in the wage bill and capital expenditure (about 20 per cent). The budget expansion was more than offset by the increase in oil revenue (35 per cent). Kuwait real GDP growth has been forecasted to be 6.6 per cent for 2012.

n Saudi Arabia’s Jabal Omar Development Company signed a SAR 5bn ($1.33 bn) loan agreement with a group of local banks.

n The latest DCCI study indicated that the Qatar will record a year on year growth of 9.4 per cent in 2012. This growth projection is relatively very high when compared to real GDP growth projection of 6 per cent as per IMF’s World Economic Outlook Report (April 2012).

Volume decreased 36 per cent MoM in the GCC and Value Traded also decreased 24 per cent to $37.5bn. This was on the back of 25 per cent MoM drop in volumes and 38 per cent decrease in Value Traded in May. Saudi Arabia, which accounted for 48 per cent of GCC’s total volume traded, witnessed a 21 per cent MoM drop in value traded.

For the global markets, major action was held back till month end when on June 29 after 13½ hours of talk in Brussels leaders of the 17 euro nation’s relaxed conditions on emergency loans for Spanish banks and also a possible help for Italy. Markets worldwide reacted positively to the news and all major indices made gains during the month end.

However the late surge shown by the Chinese indices was not sufficient to cover the month wide loss on concerns of a manufacturing slump. Frontier Markets ended on a slightly negative note for the month. CBOE VIX decreased 29 per cent during the month signaling reduced volatility. The CRB commodity index remained flat at the end of the month, Markaz added.