The first quarter of 2011 was filled with surprises, both economically and politically speaking. Q1 was the time of unrest in the MENA region, as frustrated citizens demonstrated (and some overthrew) their leaders, ushering in a new era in the region. Economically, markets reacted negatively to the news, and the markets were very volatile. The commodities market reacted as well shooting oil prices from the mid-$80’s range to close to $120.
In terms of equity performances, suprisingly the Saudi market was the best performer (shedding 0.9%) while the Kuwaiti market was the worst performer (declining 9.5%). Kuwait, along with Qatar and the UAE, are rated among the safest countries in the MENA region, with the least threat of any public greavance. Saudi Arabia, on the other hand, was very vulnerable to the riot virus. The Saudi market did, however, witness a lot of volatility. After news broke out of protests on Bahrain, the Saudi market shed more than 15% in just three days, only to recover these losses in the following week. Oil prices appreciating helped, as well as the extra spending intiated by King Abdulla. Kuwait’s decline may be attributed in part to the cancelation of the Zain-Etisalt deal, which would have increased the liquidity of the market.
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