Bahrain and Qatar lead the way

It was the turn of the two smallest Gulf stock markets to head higher last week, with Bahrain rising by 2.2% on dividend optimism, and Qatar up by 1.8%.

Indeed, the Bahrain Stock Exchange has got off to a good start to the New Year, posting a 4.4% gain so far in 2002. This more than makes up for the 2.45% loss suffered during the course of 2001, and left the BSE index at 1,839.46 points.

Bank stocks led the market higher with impressive gains by the National Bank of Bahrain, Investcorp and the Bank of Bahrain and Kuwait. Local market sentiment is also supported by a growing confidence in the attitude of the government with regard to economic reform, such as the ending of the telecoms monopoly.

Meanwhile, neighbouring Qatar whose relations with Bahrain have improved out of all recognition since the agreement on the Hawar Islands dispute last year, saw its bourse higher on active trading due to optimism about year-end results.

Investors in the tiny Doha Securities Market have reason to feel very pleased with last year's outcome. For in 2002 the DSM was one of the best performing bourses in the world, and enjoyed a 37% improvement in market capitalisation.

This reflects the fact that Qatar has the fastest growing economy in the Gulf and will shortly see huge growth in its earnings from LNG. Last week the DSM closed at 174.57 and should go higher again in 2002.