Key GCC stock markets remain range-bound

05/08/2015 09:15 AST

Manama: GCC stock markets remained range-bound last month with minimal volatility as investor participation declined significantly across the region owing to Ramadan, according to a report.

Research by Kuwaiti firm KAMCO Investment Company shows this also affected the overall trading activity in the market during July.

Oil prices continued to decline in July with Opec prices down by almost 14 per cent by the end of the month. First half earnings performance of listed GCC stocks indicated improvement in key sectors like banking and financial services, the report says.

Moreover, earning announcements for companies listed on Qatar, Bahrain, Oman and Dubai by the end of July indicated signs of improvement as compared to the same period last year. Trading activity plunged during July, with a monthly volume decline of 41pc and an almost one-third decline in monthly value traded.

After seeing marginal gains during June, Bahrain Bourse declined during July to 1,331.66 points, a monthly fall of 2.6pc. The market continues to see depressed trading activity as seen in the monthly traded volume of 19 million shares, the lowest level since January, as compared to 28m shares during June.

The value of total shares traded during the month also declined to BD5m, the lowest monthly traded value since January, compared with BD7m during the previous month. The average daily volume traded declined from 1.3m shares in June to just over 1m shares during July, whereas, monthly value traded declined from BD0.34m to BD0.26m.

In terms of earnings performance, total first half net profits for companies that have reported numbers increased by 16.6pc, the report says. Bahrain’s commercial banking sector recorded strong net profit growth of 16.6pc on the back of profitability improvement reported by four banks.

Earnings for the investment sector faced a setback during the first half, declining by 23.3pc to BD45.8m, although only three companies in the sector reported numbers during the month. In the industrial sector, Alba reported 107pc improvement in first half net profits to BD67m supported by higher sales volume.

The company, which is also gearing up for expansion that will make it the largest single-site aluminium smelter in the world, said it expects a steep decline in aluminium prices for the remainder of the year. It also declared an interim dividend of 5.5 fils per share to be paid in September.

In terms of index performance, all the sectoral indices ended in the red zone with the hotel and tourism index recording the steepest monthly decline of 7.2pc followed by 5.4pc decline in the investment index and 3.4pc decline in the insurance index.

Meanwhile, the commercial banks index declined by 1.4pc.

Gulf Daily News