Regional markets lose $50bn of value

30/12/2011 08:12 AST

Middle Eastern stock markets have shed more than US$50 billion (Dh183.65bn) this year as foreign investors fled the region after uprisings toppled leaders in Tunisia, Egypt and Libya.

Europe's debt crisis worsened the situation for markets that had seen tentative signs of recovery earlier in the year.

"It was probably the most volatile year I have seen in my career," said Fadi Al Said, a senior fund manager at ING Investment Management in Dubai. "Financial markets were dominated by headlines and risk aversion."

Egypt's stock-market, which closed for 55 days at the start of the uprising against the presidency of Hosni Mubarak, fell by 45 per cent this year, losing $22.7bn of its capitalisation. In Bahrain, where popular unrest also flared this year, the market declined by 20 per cent.

Abu Dhabi's and Dubai's exchanges, already suffering from weak liquidity, lost 11.6 per cent and 16.9 per cent of their respective capitalisations.

Valuations of many local stocks have hit fresh lows, fund managers say, but a lack of liquidity and interest is keeping investors from bottom fishing.

"There is a lack of confidence and interest in the market, and until we see a turnaround, we expect valuations to remain as they are," said Saleem Khokhar, the head of equities at National Bank of Abu Dhabi.

Oman's index lost 16.2 per cent of its capitalisation, while Kuwait lost 17 per cent.

"The good thing is that everybody has low expectations for the coming year," Mr Al Said said. "There are unanswered questions related to politics and economy all over the place."

Every stock market in the region fell this year except for Qatar's, which gained a marginal 1.3 per cent thanks to increasing gas production, political stability and $88bn of planned government spending. Qatar has gained political prominence this year as a result of news coverage of regional unrest by its Arabic-language channel Al Jazeera and after it provided military support to the Libyan rebels who toppled the regime of Muammar Qaddafi.

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