GCC stock markets recorded one of its worst month-on-month (M-o-M) performances in 2008 in the month of November. The recession in developed economies and slowdown in emerging markets brought down oil prices, adversely affecting oil-driven GCC economies. The price of oil fell below USD50 per barrel from its lifetime high of USD147 per barrel in July 2008, increasing the uncertainty surrounding growth in corporate earnings in the near-to-medium term. In line with this, the GCC’s market cap fell by USD127 billion M-o-M in November to US$595 billion which represents a nearly four-year low.
The Saudi Arabian market continued to witness a significant decline. After plunging (on M-o-M basis) 14.8% in September and 25.8% in October, the market lost a further 14.4% in November. During the last three months, the Saudi market has lost 45.9%. As a result, its YTD losses increased to 57.1% from 49.8% in October.
The Kuwait Price Index, which measures the performance of the Kuwaiti market, continued to decline in November and lost 9.3% M-o-M. All Kuwaiti indices declined during the month. Real estate sales in the region decreased 23% M-o-M to USD348.7 million in October 2008. While sales volume declined 30.6% Y-o-Y during January to October 2008, the number of transactions decreased 34% Y-o-Y. This factor led to a significant decline in the Real Estate index in November.
In the UAE, The Dubai Financial Market (DFM) declined 33.2%, whereas the Abu Dhabi Exchange (ADX) lost 16.5% during the month. The losses were even more evident on a YTD basis—the DFM and ADX indices fell 66.9% and 39.0%, respectively.
Qatar’s Doha Securities Market (DSM) fell 12.4% in November after falling 25.6% in October. Increased profit-booking by foreign institutional investors led Qatar’s bourse to report its sixth consecutive M-o-M fall in November. The market’s YTD losses touched 36.6% in November as against gains of 23.8% in the first half of 2008. Whereas