SHUAA Capital today issued its GCC Investor Sentiment Report, the only report of its kind for the Gulf markets. The SHUAA GCC Investor Confidence Index and its country sub-indices have a range between 0 and 200. A number greater than 100 represents positive sentiment while a number lower than 100 represents negative sentiment.
The GCC Investor Sentiment Index gained a massive 15.2 points, its second biggest ever gain on record. The results of the Index were almost entirely driven by a dramatic, positive change in investor sentiment towards the UAE. Following the Dubai World restructuring proposal that was announced on 25 March 2010, the UAE Investor Confidence Index recoded a significant jump of 36 points to a massive 120.4 points. The rest of the region also benefited from an improvement in investor confidence with all GCC Indices now above the 100 point threshold.
Mr. Sameer Al Ansari, Chief Executive Officer of SHUAA Capital commented on the results: “The increase in investor confidence towards the UAE clearly indicates that the cloud of uncertainty hanging over the investment community has now been removed. The outcome of Dubai World’s restructuring proposal has had a very positive impact on the investment community, both regionally and internationally. At SHUAA, we are confident that we can benefit from improved investor sentiment as our fee generating business lines - investment banking, brokerage, asset management, and private equity - are very well positioned for a sustained market recovery. ”
Mr. Oliver Schutzmann, Author of the Investor Sentiment Report and Chief Communications Officer of SHUAA Capital, said: “The UAE has clearly been a driver of sentiment across the region for a number of months now and March has been no exception. The positive news coming out of the UAE has had a knock on effect across GCC markets and now all indices are up on February with Saudi Arabia remaining the highest index in the region at 136.3 points. Qatar, not far behind the Kingdom, gained 6.5 points as it rose to 131.5 points. Also, for the first time since October 2009, the Kuwait Index is in positive territory at 104.5 points, its highest ever on record. Similarly, Bahrain sentiment has crossed the 100 point mark for the first time since November 2009.”
When SHUAA asked investors on their views on the six month outlook for regional stock markets, there was again a significant turnaround in sentiment, with the UAE markets leading the way. The Dubai Financial Market jumped a massive 62.3% on balance as it moved to 30% on balance for the month of March. The NASDAQ Dubai (March: 21%) and Abu Dhabi Stock Exchange (March: 45%) also recorded strong gains as they moved 48.9% and 35.2% upwards respectively.
Other GCC markets also recorded strong gains; the Bahrain Stock Exchange rose to 19% on balance this month from 5% in February; The Oman Stock Exchange gained 18.5% as it moved to 31% on balance and the Kuwait Stock Exchange moved out of neutral territory and rose to 13.1% on balance in March. The Saudi Stock Exchange and Doha Stock Market remained relatively unchanged on last month, with on balance figures of 48% and 36% respectively – still seen as significantly undervalued.
However, despite this new bullish investor outlook on the market, survey respondents still remain cautious. When asked if they would be investing over the next six months, only the UAE saw its on balance figure rise this month, by 27.1% to 7% on balance. Sentiment towards all other regional markets lost ground and moved into negative territory. Saudi Arabia (March: -10%), Qatar (March: -25%), Oman (March: -43%), Kuwait (March: -46%) and Bahrain (March -51%) all made significant losses of between 10% and 37% on balance respectively. However, this could have more to do with the global climate, as opposed to the regional situation, as both Global Emerging Markets (March: 5%) and BRIC countries (-15%) also lost ground, slipping by 10% and 25% on balance respectively.