2014/06/23 (00: 01 pm) - hits: 157 - number (3109)

"Daash" Gulf bourses suffered a $54 billion


Politics and Economics both is affected by the other design dates, geopolitical tensions since control źdaash╗ regions in Iraq from fear of the unknown to the GCC investors, since these tensions came to a sudden correction in prices in the GCC stock markets during the month of June.

In a report published by the official news agency Kuna on the performance of stock markets in the Gulf this year and affected by political events, show that since the first June, GCC stock markets lost a combined $54 billion to the market value of about $1.1 trillion, as at 18 June 2014.

But despite the big losses, but the GCC stock markets remains high by 130 billion dollars since the beginning of the year.

The highest losses in the market value of the share exchange, Qatar, amounting to 14 billion dollars, or down 7% on the highest level recorded by the market value at the end of May.

Followed by the Dubai financial market, which has accumulated losses due to profit-taking after the climb some real estate shares and banks to record levels as the market lost $ 13.5 billion (13% loss of market value) to a record $ 91 billion market value, the loss also to the Abu Dhabi Securities market, reaching 12.6 billion dollars to 133 billion dollars.

As well as the Saudi stock market lost nearly $9 billion of its market value to a record 524 billion dollars.

It also followed a downward path and Kuwait stock exchange reacted negatively with local and regional political tensions and lost $5.1 billion to $110 billion market value.

What's up?

The losses came as a result of profit-taking in Abu Dhabi and Dubai markets after significant gains in the first five months before joining the emerging markets, as well as fears of loss of Qatar to host the World Cup in 2022 after accusations of bribes pressured stocks in conjunction with profit, geopolitical tensions in the region as a result of the conflict in Iraq and reflected negatively on all markets and accelerated the process of profit-taking, particularly in the Saudi stock market.

Is expected to continue if the geopolitical instability in the region and Gulf stock markets remain volatile after the previous major motivators was reflected in stock prices and the direction of the Gulf markets during the first five months of the year 2014.

UAE and Qatar

Was to upgrade the UAE and Qatar on MSCI junior markets to emerging markets last year and activate this upgrade as since the beginning of June being the greater positive role in encouraging global financial and investment destinations for investment and foreign investment became a Chairman and an influential market performance of UAE (Abu Dhabi and Dubai) and Qatar stock exchange, acquired trades foreign investment in Dubai financial market to 41 percent of the total trading value in the first quarter of 2014, its procurement amounted to 44.7 billion and sales of 45.5 Billion dirhams.

So we began to notice a high volatility in the markets of the UAE and Qatar as a result of a foreign investment, especially in cases of political tensions in the region, where fears of foreign capital and begin selling and bleed to find its way to safe markets and away from political tensions.

New incentives

Despite the losses in June, but most of the leading shares in the GCC remains coherent and verified good rises since the beginning of the year, it is expected that the financial results for the first half of the year growth in profits and reflected positively on the performance of markets in the second half of the year and establish a new stage of growth reflects strong fundamentals and good financial performance and factor in reducing losses and return the markets to rise.

The total profits of companies listed on stock exchanges in the Gulf grew by 15% during the first quarter of 2014.

So, there will be another important motivational factor, the rising price of oil (OPEC increased crude oil $4 since the start of the month to a record 109 dollars) as a result of political tensions in Iraq and Libya has a positive impact on promoting growth in the economies of the Gulf States.

Have you entered the GCC stock markets stage a strong Bear Market correction?

Not yet in GCC stock markets stage a strong correction and approached him some markets with inflated stock prices in the United Arab Emirates, Qatar and Saudi Arabia have increased complications assessment but normal and required correction in the stock markets where it is not possible to continue rises in stock prices to infinity and this patch helps improve complications evaluation (price to earnings) and energizes the market liquidity. Strong fundamentals and improving, but some stock prices inflated and selective correction has occurred on some stocks in the UAE and Qatar.

Perhaps the geopolitical tensions in the region are the primary cause of the decline of the markets, the tensions that threaten security and peace and pointed to long-term conflicts they overcome other factors and positive indicators and strong fundamentals for the equity markets and the economies of the GCC countries and hence the panicking local and foreign investors of the negative consequences of the conflict over the long term. If these conflicts are on the rise, are expected to interact negatively with markets and enter in successive losses and sale stage.

The Kuwaiti stock market hemorrhage 1.4 billion dinars

The Kuwaiti stock exchange's problems was poor investor confidence and liquidity declined by more than half and the absence of incentives and institutional investor reluctance is not enough, even local political tensions began with, and poured oil on the fire heightened geopolitical risks as a result of armed conflict in Iraq, bringing stock losses and fluctuations.

The weighted index lost since highest level on April 16 of 5.7%. We approach the month of Ramadan and the summer holiday where usually trades and reduced market stagnated.

The lost market this month 5.1 billion ($1.45 billion) from its market value, since the loss of the 10 leading shares lost 2.8 billion ($783 million) from its market value.
Not expecting to see the period to the end of September a significant trading activity, which usually come during the first 5 months of each year, fund managers and investment portfolios to rearrange their investments based on disclosures related to the financial performance of companies that reflect the efficiency of the executive departments, in addition to future plans and projects that reveal the executive departments.

Abu Dhabi banks knit. Somewhat

The General index lost to the Abu Dhabi Securities market, about 9% of the highest recorded by the end of may, as stock prices plummeted, leading banks as a result of profit-taking, but the index is still up by 11.5 percent from the end of 2013. Despite the decline in price, but the banks have made good gains in its stock price since the beginning of the year (38% of the Abu Dhabi Islamic Bank, National Bank of Abu Dhabi 16% and 11% for first Gulf and 11.5% for Abu Dhabi Commercial Bank) real estate House by 40%.

A strong correction in Dubai

The loss amounted to 16 percent of the index's highest level recorded during the current year on 6 may 2014 as a result of selling pressure on the shares of banking and real estate sectors (which constitute approximately 66% market value of the stock exchange) and share price fluctuation (ARTC), which lost nearly 56 percent from its highest close record 9.88 dirhams, the Dubai financial market approached a strong correction (Bear Market) while losing market 20% within a short period as a result of sales of most stocks that inflated prices. Despite those losses, the Dubai financial market still high by 34% since the beginning of the year as a result of the remarkable gains in leading shares, coherent (ages 32%, arabtec 109%, UAE Abu Dhabi National Bank, 31.5%).

The Saudi market, the most coherent. So far

Despite the decline in the Saudi stock market this month as a result of the interaction of the market with political events in the region from June 11, but could the coherence and offset some of the losses, with still market general index (circulation) high by 13% since the beginning of the year and the lowest for only 2.7% of the highest recorded since the financial crisis closed on 10 June.