Kingdom leads gainers as GCC markets in uptrend

09/05/2009 00:00 AST

Returns in the GCC equity markets showed signs of significant momentum in April at 16.83 percent from 7.94 percent return in March.

A report by Kuwait Financial Center (Markaz) on Thursday said all the GCC markets posted positive returns in April. Five of the six GCC markets posted returns in excess of 10 percent.

Saudi Arabia led the gainers with a return of 20.8 percent. In March, due to the reversal in trend, the momentum model was overweight on all the markets, due to which it was leveraged by 20 percent. This had led to significant out performance of the model as compared to the SAA. The out performance for the month of April was at 3.32 percent and for the year at 6.46 percent.

Similarly, in the case of emerging markets and the world indices, the trend of momentum continues to be strong post the reversal in March.

The MSCI world index increased by 11.9 percent after posting a gain of 8.29 percent in March. The MSCI emerging market index too increased by 12.8 percent after posting a return of 10.4 percent in March.

The volatility levels continue to be lower as compared to the recent peak witnessed in November 2008.

However, on a M-o-M basis, there has been an increase in volatility for five of the seven markets (ADSM and DFM are counted as two different markets) in the GCC region. Among the developed and emerging markets, the volatility levels continue to witness a decline. Volatility levels continue to be lower than the recent historic peaks witnessed in October-November 2008.

For the ex-GCC indices such as the S&P 500 and MSCI EM, the volatility levels are down by 58 percent and 65 percent, respectively, from their recent peaks in 2008.

MVX for individual markets such as India and China have also witnessed declines by 56 percent and 57 percent respectively.

For the GCC region, the MSCI GCC index is lower by 26 percent from its recent peak. However, majority of the markets ex-Kuwait and Qatar has witnessed increases in volatility levels in April on a M-o-M basis.

Bahrain which posted a continuous decline in volatility levels from September 2008, witnessed its volatility levels increase by almost 2 times in April alone.

Saudi Arabia’s Tadawul All-Share Index (TASI) surged 20 percent in April after gaining 7.28 percent in March.

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Saudi Gazette