GCC Markets Performance in August 2013, Report

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· GCC markets lose steam in August on global cues
· Global markets decline on Syria concerns
· Combined market capitalization falls 1.6%MoM in August

GCC markets dip in August
GCC markets indices slid in August after a recovery in July. All markets, except MSM, declined during the month. KSE fell the most (5.4%MoM), followed by ADX (2.9%MoM) and DFM (2.5%MoM). GCC markets continued their rally, which started in July, through most of August owing to strong 1H13 corporate earnings and improving economic performance. Thereafter, the markets lost steam and tanked on rising geopolitical tensions in Syria. However, the fall remained restricted as GCC markets were more resilient to the impact of a possible tapering of the US bond buying program.

Combined market capitalization falls 1.6%MoM in August
The combined market capitalization of all GCC bourses fell 1.6%MoM to USD850.2bn in August. All GCC markets, except for Oman and Bahrain, witnessed a decline in market capitalization during the month of August. TASI remained the highest contributor with its market capitalization standing at USD410.6bn. UAE markets (Abu Dhabi and Dubai) accounted for 17.6% of GCC market capitalization, standing at a combined total of USD149.5bn in August. Qatar contributed USD144.4bn (17.0%) to GCC market capitalization. Kuwait, Oman and Bahrain together amounted to USD145.7bn to market capitalization in August.

GCC trading activity continues to decline
Overall trading activity in GCC countries declined for the third consecutive month in August, with fall witnessed in both value and volume of shares traded. Volumes decreased 1.2%MoM with Saudi Arabia, Kuwait and Oman registering a decline. Similarly, value traded decreased 15.3%MoM with all countries, except for Qatar and UAE, recording gains during August. Bahrain saw the biggest fall in value traded (-63.9%MoM), followed by Saudi Arabia (-20.4%MoM) and Kuwait (-33.4%MoM). Meanwhile, Saudi Arabia witnessed a decline of USD5.8bn in value traded, the largest decline on absolute basis.

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