Most Mena markets closed in red in May: Markaz report
06 Jun 2017 - 0:11
The markets in the Middle East and North Africa (Mena) region, with the exception of Egypt, closed in the red for the month of May.
Dubai, Abu Dhabi, Saudi Arabia and Qatar markets shed 2.2 percent, 2.1 percent, 2 percent and 1.6 percent, respectively, according to Monthly Market Research report released by Kuwait Financial Centre (Markaz).
Middle East funds pulled out of the UAE markets in view of soft real estate activity and tight liquidity prevailing causing the Dubai and Abu Dhabi markets to decline. Despite positive events such as Trump’s visit and MSCI announcing that the inclusion of Saudi Arabia into emerging markets would happen sooner, fragile outlook on oil turned investors bearish. Kuwait price index and weighted index lost 0.8 percent and 0.9 percent, respectively.
Egypt was the only bourse in Mena region to gain 5.6 percent last month, as foreign institutional investors welcomed the central bank’s efforts to curtail inflation and increased their investments.
Value traded and volumes in May reflected a negative mood, with volume traded, dropping by 35 percent while the turnover in the market declined by 7.2 percent. All Mena markets, barring Qatar and Egypt, witnessed fall in liquidity.
Kuwait saw a 75 percent fall in liquidity while it declined by 22 percent in Dubai. Liquidity declines are common in the Mena bourses, especially due to poor trading activity in the month of Ramadan. In terms of valuation, P/E of Morocco (18.9x), Qatar (14.33x), and Kuwait (14.22x) markets were at premium, while the markets of Dubai and Bahrain (9.3x), and Egypt (9x) were the discount markets in the MENA region.
Many blue chips were in the red in May, while companies such as DP World, Kuwait Food Company and Mashraf Al Rayan gained 12.5 percent, 11.3 percent and 6 percent respectively. DP world is expected to expand its operations to countries such as Russia. It has already obtained permission for the container operation of Santos port in Brazil. Expansionary activities improved investor sentiment over the prospects of the company. Among companies that lost, Ezdan Holding plunged by 27.5 percent followed by Kuwait Projects Company that dipped 15.7 percent last month.
Ezdan holding’s shareholders have given preliminary approval for the company’s plans for delisting leading to the selling pressure in the market.
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