Emirates 24/7 - 03 October, 2011
Battered by a slump in average trading volumes, ongoing global economic uncertainty and regional political turmoil, stock markets in the six Gulf Cooperation Council (GCC) nations together lost $ 40.85 billion in market capitalisation in the third quarter of 2011, Emirates 24/7 research shows.
From $ 720.93 billion on June 30, 2011 (end of Q2, 2011), the combined market cap of the seven Gulf bourses declined 5.66 per cent to $ 680.08 billion on September 29 (last trading day of Q3, 2011), data shows.
Saudi Arabia, the GCC’s largest stock market, was responsible for a majority – more than 60 per cent – of the combine losses incurred by the GCC bourses. The Saudi exchange lost more than $ 25 billion in market capitalisation, or 7.18 per cent, during the quarter, with its benchmark Tadawul index sliding by 8.14 per cent in the three-month period.
Although the Gulf markets traditionally witness a slowdown in trading volumes during the holy month of Ramadan, this year volumes were particularly impacted by lack of liquidity and low investor confidence. Average trading volumes for the Saudi stock market show a 35 per cent decline from $ 1.32 billion in Q2 2011 to $ 860 million in Q3 2011.
However, it was neighbouring Bahrain that lost the most in percentage terms – more than 11 per cent, or $ 2.17b, of the Bahrain Stock Exchange’s market capitalization was wiped off during the third quarter of 2011 – over and above a 5 per cent decline in market cap the BSE witnessed in the second quarter of the year.
The BSE index decline 11.67 per cent during the quarter, and is down 17.7 per cent year-to-date. Average daily volumes on the BSE were down more than 50 per cent, from $ 1.215 million in Q2 2011 to $ 579,369 in Q3 2011.
Oman’s Muscat Securities Market (MSM) was the only market to have witnessed market cap growth in Q3, with its market capitalization growing 5 per cent, from $ 17 billion at the end of Q2 to $ 17.87 billion at the end of the latest quarter. Volumes at the Omani bourse were down a third from $ 9.28 million in Q2 to $ 6.26 million in Q3 2011.
None of the other GCC bourses managed to grow its market capitalisation in the previous quarter, with Abu Dhabi market cap declining by 6.2 per cent, from $ 70.86 billion in Q2 to $ 66.46 billion in Q3, and Dubai declining by 5 per cent, from $ 34.14 billion to $ 32.43 billion in the same period. Volumes at the Dubai Financial Market were down 54 per cent – the most amongst the GCC exchanges – from almost $ 50 million in Q2 to $ 22.87 million in Q3 2011.
Market capitalisation of the Kuwait stock exchange declined 6.5 per cent, from $ 108.52 billion to $ 101.49 billion, and that of the Qatari exchange fell just 1 per cent, from $ 122.22 billion to $ 120.88 billion in the same period.
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