Sluggish oil hit major stock markets across the Middle East and Africa as market capitalisation of 14 bourses in the region fell by 12.19 per cent to $1.08 trillion last year from $1.23 trillion in 2014 according to latest data.

Stock markets in Qatar Egypt and Saudi Arabia were major losers as investors withdrew $119.84 billion from these countries as the bearish oil casts dark shadow over region's growth prospects in the medium term scenario.

Latest data from Arab Monetary Fund's website shows that Doha Securities Market's capitalisation dropped by 18.27 per cent to $151.88 billion last year from $185.85 billion in 2014.

Egypt Capital Market and Saudi Stock Exchange lost 18.1 per cent and 14.81 per cent capitalisation respectively. In terms of value Saudi Arabia was the major loser in 2015 as it incurred loss of $73.21 billion market capitalisation that declined to $421.03 billion from $494.24 billion in 2014.

The Dubai Financial Market and Abu Dhabi Stock Exchange also lost $3.95 billion and $4.18 billion respectively in market capitalisation last year. Kuwait Stock Exchange's capitalisation hit $96.26 billion last year with no comparable figures available for 2014.

In terms of market capitalisation Beirut Stock Exchange and Palestine Securities Exchange closed the year in positive columns with slight gains of 4.71 per cent and 0.73 per cent respectively. Beirut Stock Exchange's capitalisation reached at $17.76 while Palestine Securities capitalisation rose to $3.33 billion from $3.18 billion in 2014.

Analysts and financial experts said near term outlook for regional markets will remain volatile and subdued due to low oil prices. They were of the view that stability in the oil prices will be required to draw a constructive case for the equity markets in the region.

"It is likely for the first half of 2016 regional markets will correlate very highly with oil just as they did in 2015" Shailesh Dash chief executive officer of Al Masah Capital Management told Khaleej Times.

He said strategic investments in growing sectors like healthcare education and consumer staples will find greater favour in 2016 as investor look to diversify their portfolio away from real estate and financials.

Saleem Khokhar head of equities at National Bank of Abu Dhabi's Asset Management Group said the weakness in the oil price will continue in the near term as the market has to absorb 2.5 million to three million barrel per day excess supply.

"In 2016 it is expected that nearly 1-1.5 million barrel per day of oil supply will be curtailed while demand could grow at 1-1.5 million barrel per day. Thus by late 2016 the oil market could rebalance" Khokhar said.

"With the oil price hovering below $40 per barrel it is expected that marginal oil producers will also be forced to lower their production" he added.

Among the other countries which lost market capitalisation include Bahrain [17.05 per cent or $3.59 billion] Casablanca Stock Exchange [16.47 per cent or $8.97 billion] Muscat Securities [1.17 per cent or $0.32 billion] and Amman Stock Exchange [1.72 per cent or $0.44 billion]. Tunis Stock Exchange's capitalisation fell from $9.28 billion in 2014 to $8.82 billion last year reflecting an year-on-year decrease of 4.95 per cent.

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