Gulf investor confidence hits seventh-month high

The Shuaa Capital GCC Investor Sentiment Index, which gathered feedback from investors in all six GCC countries in September, rose nine points to 119, its highest point since March 2010. The indices for individual countries in the Gulf show that there has been an increase in every country except Bahrain.

'The Dubai World restructuring agreement marked possibly the most significant moment for regional economies since November last year. Investors have stood by for a clearer outcome surrounding the restructuring progress,' said Sameer Al Ansari, CEO of Shuaa Capital.

'As this latest report shows, investor confidence is slowly returning and we expect it to continue over the course of the next few months,' he said.

UAE sees sharp rise in confidence index

The index is based on a range between 0 and 200. A number greater than 100 represents positive sentiment while a number lower than 100 represents negative sentiment. Kuwait witnessed the biggest rise in confidence, as its score jumped 15 points to 114. The UAE tallied the second-highest growth in the index, rising 13 points to 117.

Saudi Arabia once again had the highest level of investor confidence in the GCC with a score of 133 points. Qatar tallied 130 points, while Oman registered 120 points. Meanwhile, Bahrain's Index dipped by five points but remains in positive territory at 106.

'Driving investor confidence in the region are the recent successful bond issuances out of the UAE and Qatar and the Oil price which has gained almost $16 per barrel since 2009, equivalent to a 26% year-on-year increase,' noted Oliver Schutzmann, author of the Investor Sentiment Report and Chief Communications Officer of Shuaa Capital.

GCC economic outlook bright

The respondents' six-month economic outlook for the GCC economy as a whole rose 5.3%, reaching 31.6%. The UAE was the GCC's largest individual gainer in this category, rising 18.4% to 31.6%. Similarly, Kuwait's economy has a much more encouraging outlook, with its on balance figure rising 11.4% to 24.6%.

In response to the question on 'forecasting six months stock prices on the GCC exchanges', investors overwhelmingly expected companies' share prices to gain further. Specifically, the Abu Dhabi Stock Exchange (ADX)and Saudi Stock Exchange (Tadawul) were mentioned as the two most likely to rise the furthest, up 11.4% and 20.2% respectively, reaching 35.1% and 43.9%.

Also, for the first time since the report was first published in March 2009, all company sectors are expected to see increases in profitability over the next six months. Transportation and logistics led the way, with 47.4% of respondents forecasting profit increases in this sector.

The real estate, construction, and materials sector rose 12.3%, bringing the figure up to 1.8%, which is the first time the sector reported a positive balance in the report's history.