Investors take home $145bn in five months

Investors in seven Gulf bourses have made more than $145 billion (Dh532.1bn) in nearly five months despite occasional pitfalls caused by persistent speculation in some markets this year, official figures showed yesterday.

All bourses emerged as gainers just before the start of the long summer lull in the Gulf Co-operation Council (GCC) stock exchanges but Kuwait was the most generous, with investors reaping more than half the windfall.

Daily market figures by the Abu Dhabi-based Arab Monetary Fund (AMF) showed Qatar was the second-biggest gainer, while the largely speculative markets of Saudi Arabia and the UAE were the third and fourth.

The quiet exchanges of Bahrain and Oman also ended the season higher.

From around $988.72bn at the end of 2007, the market capitalisation of the seven bourses [including two in the UAE], shot up by about $145.16bn yesterday.

"Investors in the GCC stock markets could lose on a daily or weekly basis given the high degree of speculation in some bourses," an Abu Dhabi stockbroker said.

"But taking it on monthly or quarterly or annual basis, they have been making high profits because market fundamentals dictate this… the bourses are passing through a period of a general economic upswing in the region and a strong performance of most listed companies… so it is normal that they end the period higher and they could be even much higher without speculation."

The AMF figures showed Kuwait's stock market was the best performer during January-May, gaining $78bn.

Qatar's Doha Securities Market surged by around $33bn, while there was an increase of nearly $20bn in Saudi Arabia's Tadawul exchange and about $11bn in Abu Dhabi and Dubai bourses. The stock markets of Oman and Bahrain gained around $4bn and $1bn respectively.

The report showed the seven bourses had 663 listed companies on Thursday compared with 642 companies at the end of 2007.

Dealers said this had no major impact on capitalisation since most companies that regularly enter or exit the markets in the six-nation GCC are relatively small. Although yesterday was the end of weekly trading in the GCC's bourses, turnover remained as high as $3.38bn, more than 85 per cent of the total shares traded in the Arab world's 16 official stock exchanges.

A breakdown showed the Saudi Tadawul was by far the busiest bourse, with a turnover of $1.95bn, more than a third of the total Arab turnover. It was followed by Kuwait, with around $648 million, the UAE, with $432m and Qatar, with nearly $318m. The rest were in Bahrain and Oman.

"Trading will start to slow down in the next period because of summer but our expectations are that 2008 will be another good year for investors," one dealer said. "That was the case in 2007, when the region's stock markets see-sawed through the year but ended much higher."

Annual figures by the AMF, the Arab League's main financial institution, showed investors in the Arab bourses netted a staggering $448bn during 2007 as their market capitalisation jumped to around $1.338 trillion at the end of 2007 from nearly $890bn at the start of the year.

The numbers

$448bn: Annual figures by Arab Monetary Fund show investors in the Arab bourses netted $448bn during 2007.

$1.95bn: Saudi Tadawul was by far the busiest bourse, with a turnover of $1.95bn, more than a third of the total Arab turnover.

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