Arab markets gain over $57 bn in 10 months

Arab bourses ended the first 10 months of this year richer by over $57 billion as they extend growth recorded in 2009 following a loss of more than $500 billion in 2008 because of the global fiscal distress, official data showed Sunday.

In October alone, the Arab world’s 13 official stock exchanges gained around $13.9 billion in market capitalization and the bulk of the increase was in Abu Dhabi and Kuwait, showed the figures by the Arab Monetary Fund (AMF).

“Most stock markets in the Arab region, mainly those in the Gulf, have relatively stabilized despite some slight fluctuations through the year,” said Fadi Kiswani from the Sharjah-based Sharhan Securities, a key UAE stockbrokerage firm.

“Our expectations are that most regional bourses they will end the year slightly higher because of returning confidence, the recovery in regional economies, stronger oil prices and rebounding profits by many companies in the region.”

From around $894.8 billion at the end of 2009, the combined market capitalization of the 13 official Arab stock exchanges swelled to nearly $952.5 billion on Sunday, an increase of about $57.7 billion.

In March, the capitalization had climbed to a one-year high of around $970.3 billion before it started to slide in the following months. It recovered to $938.6 billion at the end of September and climbed further a month later.

The performance through 2010 extended growth in 2009, when the market capitalization of those bourses gained around $82 billion.

The report by the Abu Dhabi-based AMF, a key Arab League institution, showed the performance in 2010 and 2009 was in sharp contrast with 2008, when the markets collapsed by a staggering $525 billion because of the global crisis. More than 70 per cent of the losses were in the Gulf bourses.
A breakdown showed Gulf bourses were the star performers in 2010, with that of Abu Dhabi rising from around $70.1 billion at the end of 2009 to $73.9 billion at the end of October. Dubai’s market capitalization climbed from around $54.9 billion to nearly $56.8 billion in the same period.

Kuwait surged from $100.9 billion to $126.2 billion while Oman and Bahrain rose from $18.9 billion and $16.3 billion to $20.9 billion and $16.8 billion respectively.

Saudi Arabia, by far the largest and most speculative Arab market, increased from about $331.2 billion to $335.4 billion.

Market reports showed Saudi listed companies performed better than had been expected in the third quarter of this year with their consolidated net income swelling by 19.5 per cent despite disappointing results by banks.

The combined net profits of 137 of the 145 listed firms rose to SR21.1 billion in the third quarter of 2010 from nearly SR17.7 billion in the third quarter of 2009.

In the UAE, the second largest Arab economy, 40 of the 106 listed companies that have released quarterly financial results recorded a 1.6 per cent growth in their net income to nearly Dh22 billion in the first nine months of 2010 from around Dh21.6 billion in the same period of 2009.

In Qatar, the fastest growing economy in the region, the net profits of the listed companies surged by about 18.3 per cent to QR23 billion in the first nine months of 2010 from around QR19.4 billion in the first nine months of 2009.

“The performance of many companies in the region is expected to slightly improve this year although many banks are still building up provisions…I think the region’s bourses are gradually back on track,” Kiswani said.

Outside the Gulf, Egypt and Morocco were the main gainers this year with their market capitalization growing from $74.7 billion and $63.4 billion at the start of the year to $79.6 billion and $66.2 billion at the end of October respectively.

The bourses of Lebanon and Jordan recorded a slight decline in the first 10 months while Tunisia and Palestine edged up slightly.

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