JEDDAH – GCC markets were up again in March, gaining 4.6 percent after surging 7.4 percent in February, Kuwait Financial Centre (Markaz) said Sunday.
Gains were led, for the third consecutive month, by Saudi Arabia, which was up 8.39 percent for the month while Kuwait’s Weighted Index gained 2.61 percent. Losses were seen in the UAE, with Abu Dhabi and Dubai declining 1.69 percent and 2.73 percent, respectively, while Oman was down 2 percent.
Saudi Arabia’s Tadawul All Share Index managed to end the 1st quarter of 2012 on a positive increase of 22.09 percent (1,417.42 points), the Saudi stock market said on its website Sunday.
It closed at 7835.15 points, and the main index for the Saudi exchange gained 1272.3 points (19.39 percent) over the close from the same period of the previous year.
The index soared to its highest level since September 2008 Saturday, closing at 7835.15 points.
TASI continued the upswing, rising 0.92 percent Sunday to close at 7,907.41 points.
“Investors are shifting into petrochemicals because fundamentals are stronger, dividend yields are attractive and they haven’t risen as much as smaller-cap stocks,” said Muhammad Faisal Potrik, research analyst at Riyad Capital.
Total equity market capitalization at the end of the 1st quarter 2012 reached SR1,539.61 billion ($410.56 billion), which increased by 16.72 percent over the same period of the previous year.
The total value of shares traded for the 1st quarter 2012 reached SR684.71 billion ($ 182.59 billion), increasing by 163.07 percent over the same period of the previous year.
An analyst said the rise which the index gained was largely due to the petrochemical sector, as it continues to gain points in 1st quarter of 2012.
Mohammed Al-Zien warned though that this rise may end in a dangerous slip in the few coming months.
He said "we are wary about the pace of the gains, the surge in volumes and the very high proportion of trading focused on a few small sectors and stocks, and this may take the index to a very dangerous level."
Region-wise, volume was up 11 percent in the GCC while value traded expanded 40 percent to $90 billion; liquidity was led by Saudi Arabia where monthly value traded was up 46 percent to $81.6 billion.
Risk in the GCC (as measured by the Markaz Volatility Index - MVX) was up 11 percent in March, but was up 2x in 1Q11. Risk in Saudi was up 26 percent for the month while MVX Kuwait shed 38 percent.
World markets were mixed due to tentative economic signals. Crude oil edged up 1.15 percent to $124.07/bbl as Iran tension continued, CRB Commodity index was also up 1.67 percent while CBOE Vix tumbled 16 percent. – SG