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2012-01-30
A report about the developments in the Arab capital markets during 2011 showed that Doha Stock Exchange and Palestine Stock Exchange PEX were the only stock exchanges that positively ended the year, where Doha Stock Exchange’ market capitalization witnessed a growth of 4.8% . The report showed that the positive performance of both stock exchanges was connected to the improvement in the market capitalization of Palestine Stock Exchange as a result of including the shares of seven companies in the PEX during 2011, and the unique performance of the Qatari economy during the year, where many investment projects and future prospects witnessed a significant expansion .Many estimations showed that the Qatari economy recorded a real growth rate of about 19% in 2011, the best growth rate ever.
The performance of many Arab Stock Exchanges’ indices reflected these developments; thirteen stock exchanges indices have declined, while only one stock exchange index rose in about 1.1% (the best for the second consecutive year) which is the Doha Stock Exchange Index. Saudi Stock Exchange, Palestine Stock Exchange and Tunisia Stock Exchange declined by 3.1% , 4.6% and 7.6% respectively .While the Stock Exchanges of Abu Dhabi , Amman , Bahrain , Dubai , Kuwait , Muscat , Casablanca and Beirut declined by rates ranging from 11% and 25%. The report also showed that one of the most important developments that Palestine witnessed is the decision concerning the rules and procedures of dealing with the Global depositary receipts and others. The year 2011 was stressful for many Arab Stock Exchanges. Despite beginning the first weeks of the year with increases, recovering from the declining in 2010, but this improvement has stopped with the Arab revolutions and the Euro Zone credit crisis.
In addition to the declining in the price indices in 2011, there was a continued scarcity of liquidity as what trading indicators show. The trading value during the year 2011 reached $ 392.9 billion , a very decreased value compared to the years 2007 to 2009 ( reached an average of $ 821.6 billion annually) despite being better than 2010 due to the relative improvement in liquidity of Saudi Stock Exchange and Qatar Stock Exchange. This reflects the scarcity of liquidity in which the Arab Stock Exchanges are dominated by individual investors. Institutional investment remains limited, which is linked to the vulnerability of the small sizes of non-bank financial institutions. Despite the increasing number of investment funds operating in the Arab markets, the size is still limited. Where the total assets of the funds invested in Arab stock exchanges represents less than 2.0 per cent of total market Capitalization of the total Arab markets by the end of 2011. And the projections of the Arab stock exchanges performance through the current year including Palestine, the report said: «, as was the case during 2011, Arab stock markets will be affected by the global economic developments and the unfolding in the Arab region incidents, particularly the repercussions of the sovereign debt crisis in Europe and its reflection on the capital markets and the international stock markets. The prospects for the global economy for the year 2012 are less optimistic than previously, due to fears of the consequences of this crisis and the prospects of the slower growth in the Chinese economy. There is no doubt that these perspectives were reflected on the Arab economy’s growth estimates for the year 2012, which shows that the Arab economies will be recording growth rates close or less to those rates achieved in 2011. This contrasts with the previous estimates referring to achieve higher growth rates for 2012. The report illustrated that if the stability to some Arab regions achieved, it would contribute to the recovery of the stock markets, where most of the shares" prices reached to levels that would attract investment, and this will pave to restore these markets for some of its losses during the previous year, Especially the Egyptian stock market, which declined in size from fourth place among Arab stock markets at the end of 2010 to Seventh place at the end of 2011. Finally the expectation to continue the growth in initial versions of securities and instruments, especially the last which is receiving increasing attention in the funding strategies of the Arab companies, this enhance it with the decrease of the collected Bank lending’s activity to impact the relative downturn of the European and international banks in the emerging markets, as a result of the argument from the debt crisis by new regulatory requirements on these banks.
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