GCC Market Review – July 2009 (PDF)

The performance of GCC markets were mixed during the June-09. Two of the markets - Kuwait and Oman ended the month on a positive note whereas rest of the four markets witnessed losses during the June-09. In fact most of the markets performed well during the first half of June-08; however performance turned negative during the second half of the month. Investors’ concern about exposure of the GCC banking sector to Saad and Al Gosaibi groups of Saudi Arabia impacted the market performance during June-09. Though there has been no confirmed news about total exposure to these two groups, newspaper reports suggest that the total exposure (including International banks) might exceed US$10bn. In the absence of any other significant regional developments, markets continued to be impacted by international developments. The decline in international markets during the second half of the month impacted regional markets’ performance. Price of OPEC Basket crude touched its highest level of 2009 on 11th June; however the subsequent fall in oil prices impacted regional markets. Looking forward, the performance of regional markets in short-term will depend on corporate earnings for Q2-2009. The performance of Q2-2009 is expected to be better than Q1-2009; however Saad and Al Gosaibi episode might impact banking sector performance. The medium-term performance of markets will depend on economic recovery but in the short-term we are likely to see stock-specific movements.