Among regional markets, UAE markets saw maximum decline during November-08. UAE market, as represented by NBAD Index, was down by 22.1% to reach 6,987.9 points.
Saudi Arabia market was the second highest decliner during the month as it declined by 14.4% to reach 4,738.1 points. With this, YTD decline in Saudi market has reached 57.1% making it worst performing market in the region for the year. Most of the declines in regional markets took place in the first half of the month, whereas during the second half markets were relatively stable and even improving in some cases like Oman and Kuwait. Positive developments in international markets during the second half of
the month proved to be beneficial for the regional markets. However given the current volatile environment, it is very early to think that markets have reached the bottom.
Market activity
GCC bourses saw 21.8bn shares being traded in the month of November-08 as compared to 23.0bn shares recorded in the previous month. Similarly, the value of shares traded on the bourses declined to $ 49.4bn in November-08 as compared to $ 56.9bn reported in the previous month.
The breadth of GCC stock markets was heavily tilted towards decliners in November-08 as 117 stocks registered monthly gains as compared to 417 decliners whereas 200 stocks remain unchanged.
Qatar petrochemical sector
By the end of 2007, the production capacity of the State of Qatar claimed 7.5% of the overall production capacity of the world. On the other hand, the State also captured 11.3% of the MENA region capacity and ranked 3rd after Saudi Arabia and Iran. A major part of Qatar’s petrochemical production is exported. It is worth mentioning that the production capacity of petrochemical products in Qatar is held by the affiliates / subsidiaries of two state-owned companies i.e. Qatar Petroleum and IQ. Furthermore, a
majority of the IQ stakes are held by Qatar Petroleum, which makes IQ a subsidiary of Qatar Petroleum. It is worth mentioning that the production capacity of petrochemical products in Qatar is held by the affiliates / subsidiaries of two state-owned companies i.e. Qatar Petroleum and IQ. Furthermore, a majority of the IQ stakes are held by Qatar Petroleum, which makes IQ a subsidiary of Qatar Petroleum.
The huge gas reserves in the country and developed gas infrastructure help the domestic companies to get undisrupted supply of feed stock gas. Moreover, the huge amount of reserves will also help the government of the country to provide gas at subsidized rates ranging $ 1.0-1.5 per million British thermal unit (mmbtu), which help the local industries to compete with the countries outside MENA region.
Based on the relatively high gross margins with the undisrupted availability of feedstock gas the government of the Qatar during the period of last five years, like the other MENA countries, has put its efforts to reduce the dependence on crude oil will lead to a massive growth in the petrochemical sector. Based on the expansion plans of, the overall capacity of non-fertilizer basic petrochemical products in the country is expected to make an investment of $ 14.9bn (QR54.4bn), which will increase the production capacity at a CAGR of 6.6% to reach 12.4mn tons in 2011 from 9.6mn tons in 2007.
