GCC Markets Performance in February 2013

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GCC were unstable in February; TASI consolidated under 7,000
Highest MoM gains belongs to Abu Dhabi and Kuwait
Trading activity withdraws on MoM basis
Activity of IPO still muted
GCC Market Unstable, But Outlook is Promising

Reports show that global equity markets did not have a stable performance this February. That is due to the fact the investors acted with more cautiousness despite that 2013 started promisingly. The positive trend continued during the entire January. However, it greatly slowed down after investors became less active and more observing when it came to the possible adoption of a plan for spending reduction. The plan is called Sequestration and it is estimated to cost $85 billion. In addition, investors were also cautions because of the growth issues in the Eurozone and China. In February, the lack of commitment of the Federal Reserve towards the quantitative easing program made investors even less optimistic. In the meantime, PMI (the Purchasing Managers’ Index of the Eurozone) dropped and put an end of the positive tendency of the last couple of months. Last month, the Dow Industrial Average accumulated 1.4% and FTSE100 increased with 1.3%. In addition, GCC markets managed to witness only tiny profits.

Combined Market Capitalization Increases with 0.1%MoM

Last month, GCC bourses’ combined market capitalization increased with 0.1%MoM reaching $767.8 billion. In addition, their performance was not stable since in February three markets fell and four grew. The biggest GCC market is Saudi Arabia. However, even it marked a drop of $2.3 billion over the January – February period. The $381.6-billion market capitalization of TASI made up 49.7% of the entire capitalization of GCC. Qatar’s capitalization, which is the second biggest GCC, dropped with $2.5 billion last month. In that way it managed to take only 16.7% of the entire GCC capitalization. In comparison, the market in the UAE, (Dubai and Abu Dhabi) jumped with 5.7 billion in capitalization this February.

GCC Activity Decreased Last Month

GCC countries’ general trading activity fell in terms of MoM last month. With the exception of Oman and Qatar, every GCC market experienced a decrease in the traded value. The market in Saudi Arabia fell with 7.8%MoM reaching 31.5 billion in February. The UAE, in the other hand, dropped with 9.2%MoM hitting $3.3 billion. Nearly 85% of the whole value traded in February was held by Saudi Arabia and the UAE had 8.8% of it. The total percentages fell with 2.8% MoM reaching 24.1 billion. That was mainly because the 14.6%MoM decrease in the markets of the UAE.

Initial Public Offering Continued be Subdued

In February, only on one market there was an initial public offering (IPO) – Saudi Arabia. The National Medical Cure Co. released its IPO and it put on sale 13.5 million shares at SAR27.0 for each of them.

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