Arab stocks end 2011 with sharp losses due to uprisings, global woes

By Abdul Jalil Mustafa Dec 30, 2011, 13:31 GMT

Amman - Arab stock markets suffered extensively in 2011 mainly due to the Arab Spring uprisings, global recovery concerns and the eurozone sovereign debt crisis, financial analysts said Friday.

The losses ranged, from 3.06 per cent for the Saudi market to 49.3 per cent for the Egyptian bourse.

For the last week of 2011, regional bourses inched up, mainly due to year-end window-dressing tactics and keenness on the part of investors to build up positions ahead of annual corporate earnings' statements, they added. But that did not reverse the overall trend.

'Arab markets recorded major losses across the board in 2011 due to the Arab Spring revolts, other geopolitical developments and exacerbating fears about an early world recovery,' Wajdi Makhamreh, chief executive of Amman-based Noor Investments, told dpa.

He expected the persisting eurozone debt ordeal; the escalating standoff between Iran and Western powers over Iranian nuclear aspirations; and Tehran's threats to close the Hormuz Straits - a key oil shipping lane - to put additional pressure on regional markets in the new year.

'Oil prices will remain a crucial factor for Middle East markets as they decide the financial standing of oil-producing countries and their ability to accumulate surplus petrodollars that seek investment outlets,' Makhamreh said.

Saudi shares extended gains in the last week of 2011, deriving momentum mainly from the unveiling by the world's largest oil-exporting country this week of a 187-billion-dollar public budget for 2012, the state's largest budget in history.

The Tadawul All Share Index (TASI) of the Arab world's largest stock exchange gained 1.4 per cent on weekly basis, closing at 6,418.13 points.

But, on a yearly basis, the Saudi benchmark lost 3.06 per cent.

'I believe the Saudi market has responded positively to the budget's projections,' Saudi analyst Yassin al-Jaffri said.

'I think Saudi stocks will advance further in the new year, buoyed by the fourth quarter results. We expect strong earnings for blue chips, mainly petrochemical firms,' he added.

Kuwaiti shares firmed this week on what analysts described as window-dressing moves that seek to raise prices of listed firms for balance sheet considerations.

Kuwait's KSE all-share index gained 0.3 per cent this week, to close year at 5,814 points.

The benchmark of the Kuwaiti stock exchange plunged 16.41 per cent in 2011, with the decline deriving additional force from local political turmoil, analysts said.

The United Arab Emirates stocks rallied this week ahead of the new year. Dubai's all-share index gained 1 per cent, closing at 1,353 points, while Abu Dhabi's benchmark rose 2.2 per cent, closing year at 2,402 points.

On a yearly basis, however, the Dubai and Abu Dhabi benchmarks plummeted 17 per cent and 11.68 per cent respectively.

Qatar's index closed the week almost unchanged, at 8,780 points. The Qatari stock exchange was the only regional gainer in 2011, up by 1.12 per cent on an annual basis.

Bahrain's index inched higher this week, closing at 1,144 points from last week's close at 1,143 points. On a yearly basis, the Bahraini index plunged 20.15 per cent in 2011.

Jordanian shares rebounded this week with the all-share index of the Amman Stock Exchange (ASE), gaining 0.9 per cent to close the year at 1,995 points, a 16.72-per-cent decline in 2011.

Egypt's AGX 30 index, which measures the performance of the market's 30 most active stocks, gained 0.2 per cent on a weekly basis, closing the year at 3,622 points.

On an annual basis, the Egyptian benchmark sank 49.3 per cent in 2011, with the market losing 32.24 billion dollars due to the uprising that toppled the regime of President Hosny Mubarak.

Analysts expected the upward correction to continue at the Egyptian stock exchange in the first week of 2012, but said further declines could not be ruled out due to the ambiguity of the political scene and the absence of incentives.