GCC investor confidence remains strong, with the GCC Index on the rise once again, according to a report by a leading regional financial services firm.

'Investor sentiment towards the region has been consistently improving over the past six months with only one month-on-month drop since April 2009,' revealed the September GCC Investor Confidence Index and Investor Sentiment Report by Shuaa Capital. This is  the only report of its kind for the Gulf markets.

“The improvement in the GCC Investor Confidence Index was largely driven by a positive shift in the balance  of investors’ perceptions of current regional economic conditions,' said Oliver Schutzmann, chief communications officer of Shuaa Capital and author of the Investor Sentiment Report.

'In September this figure moved to 15.7 per cent from 1.5 per cent last month and -15.0 per cent in July. The UAE and Bahrain drove this improvement, with increases of 11.7 and 19.6 points respectively. The UAE Investor Confidence Index has seen improvement thanks to higher confidence in the UAE’s current state of economic conditions.”

“The six month investor outlook for the GCC economy is relatively unchanged on last month’s 56.9 per cent, at 54.9 per cent in September. The GCC remains very competitive with the Bric countries and global emerging markets, which recorded figures of 54.9 per cent and 60.8 per cent respectively. The six month economic outlook for the UAE remained unchanged this month.”

“When asked which exchanges would experience a 'year-end rally', investors were very positive towards the Abu Dhabi Securities Exchange, with 51 per cent expecting a 'year-end rally' in the last quarter of 2009, while 23.5 per cent are undecided and only 19.6 per cent of investors do not expect a rally.”

This month the Abu Dhabi Stock Exchange is once again the most undervalued regional exchange in the eyes of investors, with a balance of respondents of 35.3 per cent.
It is a similar story across the rest of the GCC, where stock markets also remain undervalued, particularly Saudi Arabia’s Tadawul and the Qatar Exchange which follow closely behind the ADX at 25.5 per cent and 21.6 per cent respectively. However, both the Kuwait Stock Exchange and Nasdaq Dubai are both seen to be overvalued with respective balances of -5.9 per cent and -2 per cent.

Relatively, the region’s stock markets are seen as favourable in comparison with markets in the West. The Dow Jones 30, Eurostoxx 50 and FTSE recorded on balance figures of -31.4 per cent, -29.4 per cent and -29.4 per cent respectively.

The Shuaa GCC Investor Sentiment Report is a monthly survey which reports on the current and future expectations of the investment community towards the GCC region.-TradeArabia News Service