Saudi, Kuwait stocks jump, UAE slower

The three biggest stock markets of the GCC all reacted favorably to news that the war in Iraq seems to be drawing to an end, and more specifically that it was having a minimal impact on their own economies.

In Saudi Arabia the Tadawul all shares index was up 4.9 per cent to close the week at 2838.74 points, or up 14.6 per cent since March 18, and the start of the US-led military campaign in Iraq.
Saudi Arabian Basic Industries Corporation, one of the regions biggest stocks by market capitalization, was up by 7.9 per cent.

The Kuwaiti bourse has shot above its all-time high, with a 5% gain last week alone, while the UAE has delivered a more subdued response. The Emnex was up by 2% to 1,157.84 last week

Brokers say that the KSE and Saudi bourses may already be getting a bit carried away, and that any set back in the progress of the war could impact on share prices.

The UAE also has a significantly lower price-to-earnings ratio of less than 15, which seems to imply that the Emnex stocks are a better buy at the moment.

After all, an economic boom is already underway in the UAE - with $7 billion going to oil and gas investment over the coming two years and Dubai real estate booming. And it may be easier for quoted companies to deliver higher profits in this environment than in Kuwait or Saudi Arabia, where a softer oil price would have an immediate dampening effect.