Kuwait Financial Centre “Markaz” R E S E A R C H World markets remain in green GCC markets goes back to red September 2012 Returns (%) S&P 500 MSCI World MSCI EM S&P GCC 2.42 2.52 5.84 -1.30 GCC Composite was down in September, losing 1.30% after an increase of 2.70% in August. However, except Saudi Arabia all markets were positive. Saudi lost 4.13% during the month. Kuwait was the largest gainer (4.45%) followed by Dubai (2.00%). Dubai has been the best performing market YTD, with a gain of 16.65%. Abu Dhabi gained 1.71% and Oman gained 0.99% during the month. Liquidity surged in September as witnessed by an increase of 38% in volume traded and 28% increase in value traded to USD 39.17 Bn. Saudi Arabia, which accounted for 31% of GCC’s total volume traded, witnessed a 25% MoM increase in value traded. According to Central Department of Statistics and Information Saudi Arabia's GDP, growth slowed to 5.5% in the second quarter, compared with 5.9% in the previous quarter and 7.8% a year earlier. According to Abu Dhabi Department of Economic Development Abu Dhabi is expected to post GDP growth of 3.9% this year. National bank of Abu Dhabi is of the view that annual inflation in the UAE is expected to climb to 1.4% by year end from the current 0.95%, driven mainly by higher global food prices. Most of the World indices ended on a positive note during the month. The MSCI world index was up 2.52% for the month. India BSE (7.65%), MSCI EM (5.84%) and Asia PAC EX JP (5.58%) were the top gainers during the month. In the FOMC meeting on September-12-13, it was decided that the Fed will purchase additional agency mortgage-backed securities at a pace of USD 40Bn per month. No end date was stated. The interesting issue here is that the Fed is not buying Treasuries. There may have been concern that further purchases of Treasuries would have been disruptive of credit markets. The Dollar Index lost 2.1% in the third quarter. Spain’s banks have a capital deficit of 59.3Bn Euros (USD 76.3Bn). Spain plans to borrow 207.2 billion euros (USD 266.5Bn) next year. In France, President Francois Hollande’s first annual budget 2013 blueprint relies on 20Bn euros (USD 26Bn) in tax increases. Hollande aims to reduce spending by 10Bn euros, bringing the deficit to 3% of output from 4.5% in 2012. In China the manufacturing contracted for an 11th straight month. October 2012 Research Highlights: Review of global and regional stock markets for the previous month Markaz Research is available on Bloomberg - Type “MRKZ” <Go> Thomson Research, Reuters Knowledge Nooz Zawya Investor ISI Emerging markets Capital IQ FactSet Research Connect TheMarkets.com M.R. Raghu CFA, FRM Head of Research +965 2224 8280 [email protected]Animesh Tulsyan Analyst +965 224 8000 Ext : 4607 [email protected]Kuwait Financial Centre S.A.K. “Markaz” P.O. Box 23444, Safat 13095, Kuwait Tel: +965 2224 8000 Fax: +965 2242 5828 markaz.com
Transcript
Kuwait Financial Centre “Markaz”
R E S E A R C H
World markets remain in green GCC markets goes back to red
September 2012 Returns (%)
S&P 500 MSCI World MSCI EM S&P GCC
2.42 2.52 5.84 -1.30
GCC Composite was down in September, losing 1.30% after an increase of
2.70% in August. However, except Saudi Arabia all markets were positive.
Saudi lost 4.13% during the month. Kuwait was the largest gainer (4.45%)
followed by Dubai (2.00%). Dubai has been the best performing market
YTD, with a gain of 16.65%. Abu Dhabi gained 1.71% and Oman gained
0.99% during the month. Liquidity surged in September as witnessed by an
increase of 38% in volume traded and 28% increase in value traded to USD
39.17 Bn. Saudi Arabia, which accounted for 31% of GCC’s total volume
traded, witnessed a 25% MoM increase in value traded. According to
Central Department of Statistics and Information Saudi Arabia's GDP, growth slowed to 5.5% in the second quarter, compared with 5.9% in the
previous quarter and 7.8% a year earlier. According to Abu Dhabi
Department of Economic Development Abu Dhabi is expected to post GDP
growth of 3.9% this year. National bank of Abu Dhabi is of the view that
annual inflation in the UAE is expected to climb to 1.4% by year end from
the current 0.95%, driven mainly by higher global food prices.
Most of the World indices ended on a positive note during the month. The
MSCI world index was up 2.52% for the month. India BSE (7.65%), MSCI
EM (5.84%) and Asia PAC EX JP (5.58%) were the top gainers during the
month.
In the FOMC meeting on September-12-13, it was decided that the Fed will
purchase additional agency mortgage-backed securities at a pace of USD
40Bn per month. No end date was stated. The interesting issue here is that the Fed is not buying Treasuries. There may have been concern that further
purchases of Treasuries would have been disruptive of credit markets. The Dollar Index lost 2.1% in the third quarter.
Spain’s banks have a capital deficit of 59.3Bn Euros (USD 76.3Bn). Spain plans to borrow 207.2 billion euros (USD 266.5Bn) next year. In France, President Francois Hollande’s first annual budget 2013 blueprint relies on
20Bn euros (USD 26Bn) in tax increases. Hollande aims to reduce spending by 10Bn euros, bringing the deficit to 3% of output from 4.5% in 2012. In China the manufacturing contracted for an 11th straight month.
Ezdan Real Est. Co. 14 19.7 -3.4 -11 -27 82 198 91
Q-TEL 9 105.5 -2.1 12 -5 11 641 -11
Comr’cial Bk of Qatar 5 74.5 2.5 -11 -9 9 546 7
Source: Excerpt from Markaz Daily Morning Brief-1st October -2012.
MARKAZ RESEARCH October 2012
Kuwait Financial Centre “Markaz”
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