Arab stocks gain $12bn in 3 weeks

Arab stock markets gained a further $12 billion in the first three weeks of 2011 after leaping by nearly $100 billion through 2010, according to official data.

The bulk of the increase in the first 23 days of January was in the markets of Saudi Arabia, Kuwait and Morocco as the UAE and other key bourses maintained their capitalization levels during that period, showed the figures by the Abu Dhabi-based Arab Monetary Fund (AMF).

The increase this year extended a surge in the combined capitalization of Arab stock exchanges by around $100 billion last year to end 2010 at nearly $986.9 billion compared with $887 billion at the end of 2009.

Another increase this year came from Syria’s Damascus stock market, which was included in the AMF’s stock data base in early 2011 for the first time. Its market capitalization stood at $3.2 billion on Sunday.

The report by the AMF, a key Arab League establishment which tracks regional bourses, showed growth in 2010 and this year extended a capital rise over the past two years but the level remained far below the peak capital of $1,300 billion at the end of 2007.

It dipped to nearly $805 billion at the end of 2008 before rebounding to around $887 billion at the end of 2009, according to the AMF.

A breakdown showed Saudi Arabia, Kuwait and Morocco were the star performers in January as they accounted for the bulk of the capital increase.

Saudi Arabia’s Tadawul, by far the largest and busiest stock market in the Middle East, swelled to $358 billion on Sunday from $353 billion at the end of 2010.

Kuwait’s market capitalization grew b nearly $two billion to $126.7 billion from $124.6 billion while Morocco’s bourse rose by about $three billion to nearly $71 billion from around $68 billion in the same period.

In the UAE, Dubai and Abu Dhabi bourses remained almost unchanged while Qatar also maintained its capitalization after leaping by $24 billion in 2010. The capitalization of the three bourses stood at around $54.1 billion, $70.3 billion and $124 billion on Monday respectively.

Oman and Bahrain emerged as Gulf gainers, rising by nearly $one billion each to $22.2 billion and $2-.3 billion respectively.

Egypt’s bourse, the largest outside the Gulf, dipped by about $one billion to nearly $83 billion. The markets of Jordan and Lebanon were nearly unchanged.

Despite the surge in capitalization in 2010, turnover in the Arab bourses sharply declined because of the prevailing state of uncertainty and lack of liquidity.

From around $567 billion in 2009, the value of shares traded in the Arab markets slumped to about $343 billion in 2010. It was as high as $891 billion in 2008, nearly $1,009 billion in 2007 and as high as $1,594 billion in 2006.

Trading in Saudi Arabia plunged to nearly $189 billion this year from $322 billion in 2009 while turnover in Dubai tumbled to $18 billion from $46 billion and that in Abu Dhabi to nearly $nine billion from about $18 billion.

The value in Kuwait sank to nearly $42 billion from $74 billion while that in Qatar declined to $17 billion from $24 billion. In Bahrain and Oman, it dipped to $0.22 billion from $0.4 billion and to $3.2 billion from $5.3 billion.　

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