GCC investors regain over $38bn in three weeks

Gulf equity investors regained more than $38 billion (Dh140bn) of their huge losses in the first three weeks of this month although their wealth tumbled by more than $15bn in just one day before the weekend, official figures showed yesterday.

From about $545bn at the beginning of April, the market capitalisation of the bourses in the six-nation Gulf Co-operation Council (GCC) surged to about $583.84bn on April 21, an increase of $38.84bn, showed the figures by the joint Arab stock database at the Abu Dhabi-based Arab Monetary Fund (AMF).

The market capitalisation had gained nearly $54bn in the first 20 days before it tumbled by about $15.7bn on April 21 following report of losses suffered by Saudi Arabia's petrochemical giant Sabic.

Dealers said they expected the markets to remain unsettled in the next few weeks as investors await quarterly results by listed companies.

"There will be a state of relative instability at this stage pending the disclosure of quarterly results by listed companies," said Jamal Ajjaj of the Sharhan Securities. "But even if the results are good, that does not mean the markets will rebound sharply. At present global conditions, it is good to see a sort of relative calmness here and a floor where most of them are standing."

The figures by the AMF, which tracks the Arab world's 15 stock exchanges, showed all GCC bourses rebounded sharply in the first 20 days of April before they plunged the next day.

Saudi Arabia's Tadawul, by far the largest and most speculative stock market in the Middle East, was the main gainer in the first 20 days and the main victim the next day. Its market capitalisation jumped by about $31bn in the first 20 days before slumping by nearly $10bn on April 21.

Abu Dhabi gained about $4bn in the first 20 days but lost nearly $2bn the next day while Dubai retained most of its $2bn gains.

Kuwait, another highly speculative bourse, surged by nearly $8bn before slipping by about $1bn in the same period.

Qatar's Doha Securities Market swelled by nearly $6bn in the first 20 days but then shed around $3bn.

The smaller GCC bourses of Oman and Bahrain seesawed but ended the period almost unchanged. Despite the growth in the first 20 days, GCC markets have remained at their lowest level in nearly four years and dealers see no major rise this year.

Bourse officials have also ruled out any real improvement in regional exchanges before signs of recovery in global markets

GCC stock markets suffered from their biggest daily loss of nearly $39bn on September 15 on news of the collapse of the US Lehman Brothers Bank.

Since mid-September, their losses had totalled around $367bn, of which around $149bn were suffered by the Saudi market.

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