Spring in the step of Gulf equity markets

Spring has been good to the Gulf’s equity markets. Over the past three months, all bourses have risen by at least double digits, and all but Kuwait, Bahrain and Qatar have now returned to a positive year-to-date performance.

Global markets have also rallied, but fund managers in the region say there have been many local catalysts to spur renewed optimism. Oil prices have recovered somewhat, they say, governments are continuing to apply economic remedies, and first-quarter earnings have largely been heartening.

Morgan Stanley, the investment bank, has recommended that investors increase their exposure to Arab stock markets, arguing that “despite a sharp cyclical contraction in growth this year due to falling oil revenues, we think the region will be one of the more resilient to the global downturn”.