Five of the Gulf Co-operation Council (GCC) indices have outperformed Western markets in terms of index growth in 2007, finding places among the top 10 emerging stock exchanges in the world.
Oman’s Muscat Securities Market tops the list of GCC indices, rising 60.11 per cent, followed closely by Abu Dhabi Securities Market (ADSM), which gained 52.72 per cent since January 1 until Sunday.
The Dubai Financial Market (DFM) is placed sixth among emerging markets in terms of growth, surging 45.40 per cent. The Saudi Stock Exchange and Doha Stock Market have risen 41.77 per cent and 35.95 per cent, respectively.
In comparison, leading Western indices failed to register double-digit growth except the US’ Nasdaq, which registered a 10.73 per cent increase. Dow Jones and London’s FTSE could manage a meagre increase of 7.24 per cent and 6.23 per cent, respectively.
“The GCC has been on the watch list of funds managers for a long time. And after the market corrections in the last quarter of 2006, valuations have become more attractive for foreign institutional investors,” Mohammed Ali Yasin, managing director, Shuaa Securities, told Emirates Business. After South Korea moved out of the MSCI Emerging Market index – a benchmark for global stock funds – international fund managers have channelled their investments towards more attractive markets such as the Saudi and UAE bourses.
“The recent roadshows of ADSM and DFM generated a lot of interest in the West and the ones planned in Asian countries will help bring in more direct investment,” he said.
China topped the emerging market list with a growth of 96.66 per cent. Karachi came in fourth with 47.12 per cent, followed by the Bombay Stock Exchange, which rose 46.57 per cent. Brazil and the Hang Seng Index came in seventh and ninth with 43.65 per cent and 37.09 per cent rise, respectively. China raised $62bn (Dh227.6bn) in 240 deals in 2007, a 16 per cent rise on the volume raised in 2006, said data provider Dealogic.
“Foreign institutional investors are in the market and they are here to stay,” said an analyst. Cairo-based EFG Hermes expects a substantial increase in initial public offering activity in 2008, driven by both higher prices and volumes.