The ‘GCC Investor Sentiment Report,’ issued by Shuaa Capital on Tuesday, is 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,’ the report said.
Following the Dubai World restructuring proposal that was announced on March 25, the UAE Investor Confidence Index has recorded a significant jump of 36 points to a massive 120.4 points, the report pointed out.
The rest of the region also benefited from an improvement in investor confidence with all GCC Indices now above the 100 point threshold, said Sameer Al Ansari, chief executive officer of Shuaa Capital.
Commenting on the results, Al Ansari said 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,’ he noted.
‘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,’ Al Ansari stated.
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.’
He pointed out that 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 per cent on balance as it moved to 30 per cent on balance for the month of March.
The Nasdaq Dubai (March: 21 per cent) and Abu Dhabi Stock Exchange (March: 45 per cent) also recorded strong gains as they moved 48.9 per cent and 35.2 per cent upwards respectively.
Other GCC markets also recorded strong gains; the Bahrain Stock Exchange rose to 19 per cent on balance this month from 5 per cent in February; The Oman Stock Exchange gained 18.5 per cent as it moved to 31 per cent on balance and the Kuwait Stock Exchange moved out of neutral territory and rose to 13.1 per cent on balance in March.’
The Saudi Stock Exchange and Doha Stock Market remained relatively unchanged on last month, with on balance figures of 48 per cent and 36 per cent 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 per cent to 7 per cent on balance.
Sentiment towards all other regional markets lost ground and moved into negative territory. Saudi Arabia (March: -10 per cent), Qatar (March: -25 per cent), Oman (March: -43 per cent), Kuwait (March: -46 per cent) and Bahrain (March -51 per cent) all made significant losses of between 10 per cent and 37 per cent on balance respectively, the report said.
However, this could have more to do with the global climate, as opposed to the regional situation, as both global emerging markets (March: 5 per cent) and BRIC countries (-15 per cent) also lost ground, slipping by 10 per cent and 25 per cent on balance respectively
