Muscat: Gulf markets ended their worst quarter in many years, as almost all indices in the region ended the month on a negative note, said the Kuwait Financial Centre 'Markaz', which carries out monthly market research.
In research note, Markaz examines and analyses the performance of equity markets in the Middle East and North African (Mena) region as well as the global equity markets.
Qatar (-16 per cent) and the UAE (Abu Dhabi -13 per cent, Dubai -23 per cent) indices were the biggest losers, as investors in both markets booked profits. This decline in June is Dubai market's biggest monthly drop since November 2008. Oman's index was the only positive in the Mena region for the month of June, posting a return of 2.2 per cent. Both trade volume and trade value, in the Mena region, declined by 14 and 36 per cent, respectively.
S&P GCC recorded a decline of 7.4 per cent in the month of June, and closed at 128 points. Global Markets had mixed results in June, as S&P 500 and MSCI world grew by 1.9 and 1.6 per cent, respectively, while MSCI EM and FM indices declined by 0.7 and 0.1 per cent, respectively.
The UAE and Qatar markets declined in June, as speculative bubbles deflated stocks. The problem was compounded by the cross-border tensions and a lull in activity during Ramadan, which dampened fresh buying. Despite the fall, fund managers claimed that business confidence remains strong, as the losses were not the result of negative economic news.
Both the UAE and Qatar had soared since June last year, with billions of dollars flowing into their markets, as MSCI announced upgraded status to emerging market.
Dubai Market moved 67 per cent upwards since the upgrade announcement in June 2013, while the Abu Dhabi and Qatar markets moved up by 28 and 24 per cent, respectively. After the upgrade last month, the markets were vulnerable to both profit-booking and speculation, which caused the fall in index values. Dubai market had its first negative quarter in two years, as the index dropped by 11 per cent. Abu Dhabi and Qatar also witnessed quarterly falls of seven and 1.6 per cent, respectively. Volumes and value traded declined for all three markets in June, with trade volume in Qatar dropping by 29 per cent, and trade value in Abu Dhabi falling by over 78 per cent.
Dubai also had to contend with Arabtec, one of the major developers in the region, posting huge decrease in share values, as the company's new strategy to take on riskier and more complex projects pushed investors away. Additionally, company's CEO of Hasan Ismaik, resigned abruptly in June, and rumours about employee lay-offs and loss of government backing, influenced investors to shun the company.
Continuing management turmoil and lack of proper disclosures led to a freefall.