(MENAFN - Arab News) Stock markets worldwide had a turbulent time in the year 2011. GCC (Gulf Cooperation Council) markets were no different, as they plunged due to weakness of international economic environments. In addition to that, the political tension that spread throughout the Middle East, added to the markets' woes. Consequently, all GCC bourses ended 2011 on a lower note, barring the Qatari market which managed to eke out marginal gains, according to a report by Global Investment House (Global).
Qatar exchange appreciated by 1.12 percent by the end of 2011, thus being the only GCC stock market to record gains for three consecutive years. Despite the global financial crisis, Qatar has prospered in the last several years. IMF figures forecasted that Qatar's real GDP to pick up by about 19 percent in 2011. Qatar's successful 2022 World Cup bid is also expected to accelerate large-scale infrastructure projects such as Qatar's metro system and the Qatar-Bahrain causeway.
On the negative side, the report said Bahrain bourse posted the steepest decline amongst its GCC peers, down by 20.15 percent for the year. Bahrain's economy is estimated to have lost up to 2 billion due to political unrest that hit Bahrain in Q1, 2011. All sectoral indices ended the year 2011 on a negative note, with only a handful of stocks ending the year with gains.
In Kuwait, Global General Index ended with a 19.78 percent decline, with all sectoral indices ending the year on a negative note. Global Investment Sector Index posted the steepest decline, shedding 30.39 percent of its value in 2011. The services sector index followed with a 29.51 percent decline on the back of the notable retreat of several services stocks, including heavyweight Zain which lost around 31.8 percent of its share value.
In the meantime, the performance of Saudi stocks has seen some improvement during Q4, 2011, thanks to the distribution of good dividend by listed corporations. The Tadawul All-Share Index (TASI) appreciated by 5.0 percent QoQ by the end of Q4, 2011, which brought down the index's loss to 3.07 percent in 2011. Despite its negative performance, which was mainly due to external factors such as worries over international markets and the economic situation around the world, the Saudi market managed to end the year with marginal loss, compared to large declines of other GCC stock exchanges, the Global report said.
Market capitalization
Market capitalization for the GCC markets stood at 697.4 billion by the end of December 2011, down by 7.1 percent compared to end of year 2010. The Saudi market constituted 48.6 percent of the aggregate market capitalization of GCC stock markets.
The breadth of the GCC markets was titled toward decliners during 2011, with 402 stocks ending on a lower note compared to 220 advancing stocks, while 69 stocks remained unchanged.
The market spread was negative in five out of the six GCC markets; except in Saudi, which was the only market that had a positive advancers to decliners' ratio.
GCC trading activity
Total volume of shares traded during 2011 stood at 133.8 billion shares, which was 21 percent lower than aggregate traded volume in 2010. In the meantime, value of shares traded increased from 296.7 billion in 2010 to 356.1 billion in 2011, up by 20 percent.
IPOs
IPO (initial public offering) activity in the GCC continued to decline, as sluggish market sentiment discouraged private corporations to go public, and forced them to seek other funding options. During 2011, only nine GCC companies offered their shares to the public, with an aggregate value of 795.6 million, down by 54.9 percent compared to the previous year.
This year's IPOs were mainly concentrated in Saudi Arabia, with five Saudi companies floating their shares. The remaining offerings were one in Oman, and three in UAE.
As for Q4, 2011, all IPOs took place in Saudi Arabian market. Hail Cement Company offered 50 percent of its SR979 million (261 million) paid up capital to the public in an IPO priced at SR10 per share, during the period from Sept. 20 to Sept. 26. The company's offering was 130 percent oversubscribed.
In December 2011, two more Saudi companies offered their shares to the public. United Electronic Company (eXtra) offered 30 percent of its SR240 million (64 million) capital in an IPO priced at SR55 per share, during the period from Dec. 5 to Dec. 11. Extra's IPO was more than two times covered as overall subscription reached SR851.1 million (227 million).
The last public offering of the year was that of Saudi Enaya Cooperative Insurance Company, which took place between December 19 and Dec. 25, 2011. Enaya offered 40 percent of its SR400 million (106.6 million) capital to the public, at a price of SR10.
