LOC16:52
13:52 GMT
KUWAIT, July 8 (KUNA) -- Most regional markets rallied in 2Q15 led by a strong performance by the UAE markets, said the National Bank of Kuwait in a report Wednesday.
Following a strong market correction that was triggered by the drop in oil prices late last year, and that extended well into 1Q15, most regional markets saw a notable rebound in 2Q15, the report said.
Markets seem to have gained from stabilizing oil prices and a relatively calmer geopolitical climate, it said, noting the MSCI GCC total return index was up 4.6 percent.
The GCC markets' capitalization stood at USD 1.1 trillion, having added USD 88 billion in 2Q15, it stated.
Market liquidity dropped 22 percent with the daily traded value averaging USD 2.2 billion, it showed. Typically, activity weakens in the summer and more so notably during the month of Ramadan, it said.
In the GCC, the UAE markets outperformed with the DFM up an impressive 16 percent and the ADSM up a decent 6 percent in 2Q15, it added.
The DFM was the hardest hit market when oil prices started to drop late last year, so when oil prices finally stabilized late January, the market seemed due for a rally, it noted.
Tadawul came in behind DFM and ADX, having gained 5 percent in the quarter. The Saudi market was the only GCC market that rallied in 1Q15; surely, with the main catalyst being the decision to open up the market to foreign investors by the middle of this year, it showed.
Ironically, when the decision went into effect mid-June, the market seemed to have already priced it in and the Tadawul All-Share index dropped for a few consecutive sessions afterwards, it indicated.
The Qatari and Omani markets also made some gains in 2Q15, up 4 and 3 percent respectively, it said.
The Kuwaiti and Bahraini markets were the only two GCC markets to lose ground on the quarter, it added, noting the Kuwait Stock Exchange (KSE) value weighted index was down 0.4 percent and continued to lack a catalyst that would turn things around.
The tragic June suicide-bombing had a somewhat muted effect on prices, though it surely affected market sentiment, it mentioned.
In the coming months, regional markets are likely to continue to be focused on oil price developments, it stated.
Oil prices remain an important factor, especially for the markets/economies with weaker fiscal positions such as Dubai, Oman and Bahrain, it said. The other markets with larger fiscal buffers are likely to see more limited impact of big changes in oil prices, it added.
In those markets, such as KSA, Qatar, Abu Dhabi and Kuwait, the economies appear more resilient even with the current low oil prices, as governments renew commitments to boost or maintain capital spending and are determined to move forward on their development plans. (end)
mfs.abd.hm