JEDDAH – Investor confidence index in the GCC states either dropped or remained the same in December versus November’s data.
The SHUAA Capital Investor Sentiment Report for December
showed that UAE index slipped the most, moving to a record low of 82.5 points, although part two saw the UAE make up much of this loss, with investor confidence rising to 108.9 points.
Saudi Arabia also recorded a steep slide in its index for December, falling to 134.2 points from 143.1 in November.
Interestingly, Kuwait, which moved significantly between the part one and part two surveys in December, gained 12.5 points and remained relatively unchanged in the first part of December’s survey, losing just 2.0 points as it moved to 83.3 points.
All other markets - Oman, Qatar and Bahrain - did not see much change over the course of December.
Oman fell 4.5 points in part one and gained another 5.0 points in part two as it moved to 111.7 points at the end of December. Qatar fell slightly by 1.4 points to 140.0 points and then fell to 136.7 points in part two.
Meanwhile, Bahrain is now in negative territory after falling from 101.7 points in November to 91.7 points in December part one and then ending the month on 97.5 points. Not surprisingly, following the Dubai World news there was a massive shock which changed the view on current economic conditions.
There was a significant negative shift in investors’ perception of current economic conditions with investor confidence towards the GCC falling from 34.5 percent on balance in November to -50 percent in the December part one survey.
However, after the Nakheel Sukuk payment, this figure rose to a neutral 3.2 percent. Unsurprisingly, the UAE saw the biggest loss in investor confidence towards current economic conditions, dropping from 20.7 percent in November to -63.3 percent in December part one, making some of this up in part two by regaining some territory as it moved to -19.4 percent.
Elsewhere, investors’ perception of current economic conditions in Bahrain, Kuwait, Qatar, Oman, and Saudi Arabia all fell by between 12.6 percent and 25.2 percent, moving to -36.7 percent, -60 percent, 30 percent, -13.3 percent, and 30 percent respectively in December part one.
Meanwhile, after the Nakheel sukuk repayment, all economies, except Saudi Arabia which fell by another 1 percent, matched the UAE and recorded significant gains on December’s first survey. After the UAE, Kuwait made up the most ground as it recorded an on balance figure of -25.8 percent, gaining 34.2 percent on part one of the survey. Bahrain, Qatar and Oman all improved by between 11.9 percent and 19.8 percent in the second half of December’s survey. Interestingly, the view on current economic conditions in Saudi Arabia was relatively unaffected by the Nakheel Sukuk repayment.
The six-month investor outlook for the GCC economies took a slight hit in the first part of December, as all countries, apart from Qatar, lost ground on November’s figures.
The majority of investors expected the economic conditions of BRIC countries to strongly outperform the GCC in part one, with a balance of 43.3 percent of respondents foreseeing an improvement, compared to the GCC which had a balance of 16.7 percent. Again, contributing most to the GCC’s decline in the first half of the month was the UAE, which moved from 50 percent on balance in November, to -16.7 percent in part one of December’s survey. However, when investors were asked the same question post the Nakheel sukuk payment, there was a distinct change in sentiment.
Moreover, the report showed that all economies, except Qatar, recorded gains in their six month investor outlook on economic conditions, with the GCC making up 15.6 percent as it rose to 32.3 percent on balance. While still behind BRIC countries at 54.8 percent on balance, it still shows an improving sentiment. The UAE was the biggest contributor to this figure gaining 39.2 percent, rising to 22.6 percent on balance.
Investor’s perception of the value of the Abu Dhabi Stock Exchange, Doha Stock Market and Dubai Financial Market took a slight hit at the beginning of December, although all still staying out of negative territory, falling to 26.7 percent, 26.7 percent and 0 percent on balance respectively.
Once again, Saudi Arabia is perceived as the most undervalued stock market across the GCC with 30 percent of investors on balance saying that Saudi stocks are undervalued, an increase of 5.9 percent on November. Omani stocks also increased in December part one, gaining 10.2 percent on balance as they moved into positive territory at 3.3 percent. Meanwhile, Kuwait and Bahrain also recorded gains in investor perception of regional stock market values. On balance they increased by 7.1 percent and 3.1 percent respectively.
Going into the second half of December, there was little change in investors’ perception of the value of regional stock markets. Interestingly, only the Dubai Financial Market recorded an increase on balance, moving to 3.2percent.
Meanwhile, all other regional exchanges declined slightly. Due to the Saudi Stock Exchange’s 7.4 percent slide in the second half of December, the Abu Dhabi Stock Exchange is now seen as the most undervalued stock market according to the surveyed investors.
Investors were asked where they felt stock prices of regional and international markets would go in the next six months. Doha set the standard with an on balance figure of 46.7 percent for part one of the December survey, indicating a bullish outlook. Doha was closely followed by the Saudi Stock Exchange, with an on balance figure of 33.3 percentand the Oman Stock exchange at 23.3 percent. Comparatively, international markets did not fare as well; the FTSE had an on balance figure of 0% while the Eurostoxx 50 and Dow Jones 30 were in the negative at -13.3 percentand -6.7 percent.
The Oman, Kuwait and Doha Stock Markets all saw increases on November’s report in investor’s expectations for their performance over the next six months, when surveyed at the beginning of December. The three markets had on balance figures of 23.3 percent, 6.7 percent and 46.7 percentrespectively. Not surprisingly, there was a dramatic fall in this figure for UAE markets, with all three exchanges in the Emirates falling by around 30 percent.
The Abu Dhabi Stock Exchange remained positive at 10 percent, the Dubai Financial Market was neutral (0 percent) and investors, on balance, expected the NASDAQ Dubai to decline slightly over the next six months (-6.7 percent). – QJM

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