Mena outperform US and emerging markets

Mena equity markets rebounded by almost 4.9 per cent in February following a flat performance in January. In fact, Mena markets outperformed both emerging and US markets in the month. MSCI Arabia rose by 4.8 per cent on a year-to-date (YTD) basis, versus a YTD loss of one per cent for the S&P 500 and a YTD decline of 5.4 per cent for MSCI EM, according to a new report by Rasmala Investment Bank Limited. In the UAE, both the DFM and ADX picked up pace during February. "The DFM gained a modest 0.2 per cent and the ADX rose by 2.7 per cent on a month-to-date (MTD) basis. Tunisia and Egypt, January's leading regional markets, reversed their positions this month. The Tunindex incurred a 0.1 per cent loss while the EGX 30 fell by 1.8 per cent. Both markets were overtaken by the Kuwait Stock Exchange, which was the top performer this month with a respectable MTD gain of five per cent," says the report. Saudi Arabia The Tadawul was up three per cent by the end of February, bringing its YTD gains to 5.2 per cent. The majority of stocks ended the month in positive territory. Market heavyweight Sabic gained two per cent, pushing the index up. Savola Group grew 5.4 per cent after reporting an annual increase of 371.3 per cent in its 2009 net profits of SR952 million (Dh932.38m). Meanwhile, Herfy Food Services Company accumulated significant gains of 12.7 per cent on the back of a 25.5 per cent growth in its 2009 net profits of SR114.6m. In the banking sector, official figures from the Central Bank showed a 2.1 per cent decrease in banks' credit to SR736.9 billion in December 2009 compared to November 2009. This represents the lowest figure in more than a year. Bank stock performances were positive despite reports of considerable increases in the provisions booked against non-performing loans in the fourth quarter of 2009. Samba Financial Group climbed 9.4 per cent, Riyadh Bank gained 2.8 per cent and Al Rajhi Bank followed suit rising two per cent. In contrast, Saudi British Bank (Sabb) failed to follow the trend and declined 2.2 per cent. In the real estate sector, Dar Al Arkan (4300.SE) announced that it had raised $450m from a sukuk issue. The sukuk has a five-year maturity and is priced at 10.75 per cent. The company also finalised deals worth SR1bn with local companies to establish its Shams Riyadh Project. The stock continued to decline, down 2.2 per cent by the end of the month. On the other hand, Arriyadh Real Estate and Saudi Real Estate Company were up 6.8 per cent and 2.2 per cent, respectively. Telecom stock performances were mixed with Zain Saudi Arabia ending the month flat, while Mobily gained two per cent, followed by Saudi Telecom Company which was up 0.9 per cent. On the macroeconomic front, Moody's Investors Service upgraded Saudi Arabia's foreign and local currency government ratings to 'Aa3' from 'A1' and the country ceiling for foreign currency bank deposits to 'Aa3' from 'A1'. The country ceiling for foreign currency bonds, the local currency ceiling for bonds and the local currency bank deposit ceiling were confirmed at 'Aa3'. The outlook on the ratings is stable. UAE The UAE stock markets witnessed varied results during February. The DFM index ended the month almost level with a marginal 0.2 per cent gain, while the ADX index closed up 2.7 per cent. Emirates Telecommunication Corporation (etisalat) reported a 2009 net profit of Dh8.8bn, representing an annual increase of 3.5 per cent. During February, the company announced its intention to increase its 44.7 per cent stake in its Indian subsidiary etisalat DB to 50 per cent plus one share. In addition, it acquired a further 18 per cent stake in Atlantic Telecom worth $75m, bringing its ownership to 100 per cent. Meanwhile, Emaar Properties reported 2009 net profits of Dh327m, an annual increase of 98.2 per cent and Shuaa Capital reported a net loss of Dh529.8m in 2009 compared to a net loss of Dh889.6m in 2008. In the banking sector, Emirates NBD reported a FY09 net profit of Dh3.3bn, compared to a net profit of Dh3.8bn in FY08, a decrease of nine per cent. This was primarily due to the booking of a Dh477m loss related to its associates. National Bank of Abu Dhabi reported a flat net profit for 2009 of Dh3bn. Fitch Rating affirmed the long-term issuer default rating (IDR) of both First Gulf Bank and Abu Dhabi Islamic Bank at 'A+' with a stable outlook. Abu Dhabi Islamic Bank reported a 2009 net profit of Dh78m compared to Dh851.1m in 2008, a 90.8 per cent decrease. Kuwait In February the Kuwait Stock Exchange surged 5.0 per cent, compared to its previous flat performance in January, bringing YTD gains to 5.3 per cent. Index blue chips recorded strong growth as some companies released positive earnings, while others climbed on the back of market news. After months of negative performance, the index's heaviest constituent by market capitalisation, Zain, surged on extraordinary gains of 40.7 per cent. This followed the news that the company is