Gulf widens between global and regional markets

According to a research report from Rasmala, a leader in regional investment banking, most regional markets started the month strongly, witnessing positive sentiment combined with high trading volumes ahead of the much anticipated mid year earnings reports.

This momentum however weakened by mid-June with the DFM closing the month with a loss of over 4%, ADX at a loss of 1.67% and Oman ending its impressive run by shedding 2% for the month.

"The extremes can be witnessed by looking at the Egyptian and Kuwaiti markets," explained Khaled Al Masri, Partner, Asset Management at Rasmala.

"Kuwait managed to shrug off the wave of profit taking in other markets to end the month as the only GCC market in positive territory with a 3 per cent gain. Attractive valuations, strong companies' fundamentals and positive second quarters corporate results expectations were the main factors in pushing the KSE Price index to record levels."

"Egypt however suffered for the second month in a row from a combination of economic and social pressures and its higher correlation to general emerging market sentiment compared to its MENA peers - it closed with a 10% loss."

The DSM in Qatar bucked its uptrend of the last two months and closed slightly down by 0.18% as investors took profits after the recent rally.

The Qatari market witnessed higher than usual volume and broke the 12,500 level mainly aided by healthy performance in Islamic banks.

Saudi Arabia however reaffirmed its position as the worst performing regional market in 2008 with a loss of 1.9%.

"Investors across the region are accumulating funds through profit taking and awaiting fresh catalysts and in the case of Saudi Arabia, lucrative IPOs," concluded Mr Masri.