GCC Investor Confidence Index up 2.7% to 126.3, UAE index sees biggest gain

The report draws together the submissions from international and regional institutional investors to formulate the Shuaa GCC Investor Confidence Index. The Index has been designed to provide the global investment community with a benchmark of investor confidence for GCC countries and track changes in investor behaviour over time.

Commenting on the Index findings, Oliver Schutzmann, Chief Communications Officer of Shuaa Capital and Author of the Investor Sentiment Report, said:

"The results of the August 2009 GCC Investor Sentiment Report show that after the dip last month in the confidence index, we are again moving in a more positive direction. Although only a 2.7% gain, it is nonetheless a good sign and the small change is not surprising given that August is traditionally a quiet month."

Contributing most to this month's positive movement were The UAE and Qatar. The UAE Investor Confidence Index was this month's biggest gainer in the GCC, up 4.3% to 118.8 points. This makes up for some of July's losses after the index dipped to 113.9 points. Despite the improvement, the index still lags behind June's peak of 123.8 points. Driving the UAE Index this month was improving sentiment towards the current state of the UAE economy. Positive responses doubled to 16.9% with a similar level of negative and neutral responses at 38.5% and 33.8% respectively.

Continuing Oliver Schutzmann said, "The significant improvement in the overall GCC Investor Confidence Index was largely driven by a positive shift in the balance of investors' perceptions of current regional economic conditions. In August this figure moved to 1.5% from -15% last month."

"The six month investor outlook for the GCC economy remains positive this month, with a balance of 56.9%, which is a slight improvement on last month's 55.3%. The GCC is now ahead of both BRICs [Brazil, Russia, India, China] and Global Emerging Markets, who both recorded a lower figure of 49.2%," added Schutzmann.

Finally commenting on the GCC stock markets, Oliver Schutzmann said, "Investors still think stock markets across most of the GCC remain undervalued with the Abu Dhabi Stock Exchange being the most undervalued with a balance of respondents of 55.4%. Saudi Arabia follows closely behind at 46.2% and is considered even more undervalued than last month as is also the Doha Stock Market with a balance of 44.6%. Nasdaq Dubai is still seen as undervalued but to a lesser degree with a balance of 16.9%, a 9.8% drop. The Dubai Financial Market and the Omani stock exchange are on a par at 33.8% which is a strong improvement for both on last month."

The Shuaa GCC Investor Sentiment Report is a monthly survey which reports on the current and future expectations of the investment community towards the GCC region. Data from the report forms the Shuaa GCC Investor Confidence Index and sub-indices for all six GCC countries. The current survey was conducted between 5 and 16 August 2009. Investors were asked questions about current and future economic conditions, stock markets, sectors and commodities.

The Shuaa GCC Investor Confidence Index and its sub-indices for all six GCC countries are derived from an equal weighting of responses to four questions of the GCC Investor Sentiment Survey: current view and six months outlook on economic conditions, current view and six month outlook on equity market valuations. The Index and all 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.