Pan-Arab markets hits highest levels since 2009 in April on announcement of Saudi market going global, according to Tim Edwards, Senior Director, Index Investment Strategy at S&P Dow Jones Indices.
“The Saudi market is going global: the local authorities announced this month that their bourses would open up to direct foreign investment in equities from June 15th. The hope of increased liquidity and capital in the Arab world’s largest stock market greatly cheered the region’s equities, and the S&P Pan Arab Composite LargeMidCap index surged upwards. April’s 10.1% total return for the index was the highest for any month since the dark days of April 2009.
“More good news for the region was provided by the commodity markets. By last night’s close, the S&P GSCI Energy was already showing a 15.21% gain for the month and, at time of writing, crude oil is up further and at the highest level recorded so far this year.
“In fact, the Saudi market was not even the region’s best performing. Instead, the United Arab Emirates took the honours, pipping the Saudis to the post with a 14.5% total return. Most of our single country equity indices in the region gained, with even Turkey bouncing back after a four consecutive down months. The Egyptian market was an exception; but the S&P Egypt BMI’s decline of 5% was likely due to the implementation of new regulations on capital gains and dividend taxation, opposed to any material change in outlook.”
“Every sector in the S&P Pan Arab LargeMidCap gained. Financials, as usual, contributed the greatest to returns and Materials, punching above its weight, came a close second. Despite a small increase in U.S. bonds yields (up by 3 basis points for the S&P U.S. Aggregate Bond index), each of our regional fixed income indices gained, reflecting the broader optimism on the outlook for Arab region that characterizes the rest of our dashboard this month.”