The Arab world’s nine major stock markets recorded a significant decline in performance during the third quarter of the year 2001. The Arab Monetary Fund’s (AMF) weighted composite index dropped 4.9 percent between January and September to 98.5 points, 10 percent lower than in September-end 2000, according to the AMF's quarterly report.
Generally limited by small volume and a dearth of foreign investment, the region’s stock markets were further weighed down by the devastating events of September 11. The composite index, calculated for stock markets in Egypt, Jordan, Saudi Arabia, Lebanon, Oman, Bahrain, Kuwait, Morocco and Tunisia, dropped 8.8 percent in September 2001, compared to the previous month of August. Standing out was the Amman stock exchange, alone recording a slight monthly rise of 0.8 percent.
The fall in the AMF index for the Arab bourses is attributed to slumps on seven of the nine burses included. The Beirut bourse led the downturn with a 20.4 percent quarterly drop, followed by a 9.7 percent drop on the Cairo exchange and a 6.4 percent fall on the Saudi market. In contrast, the Tunis burse recorded an 11.6 percent index rise through the third quarter, along with the Amman stock exchange with a 7.3 percent rise.
Composite market capitalization dropped 3.1 percent reaching $150.7 million at the end of the third quarter, down from $155.6 million at the end of the previous quarter. The number of listed firms in the nine main Arab bourses slightly rose to 1,687 in 3Q 2001, from 1676 in the previous quarter.
The AMF’s weighted composite index shows that the value of traded stocks on these Arab markets rose by 15.9 percent in the third quarter of 2001, reaching $14.3 billion, compared with the second quarter of the same year, when $12.3 million were traded. The average daily trade value on these markets rose from $174.3 million in the second quarter to $198 million during the third quarter of 2001. The Amman Stock Exchange recorded the highest quarterly growth rate in trade value, at 105 percent.
The AMF’s weighted composite index indicated that the volume of trade on these markets rose by 18.1 percent in the third quarter of 2001, as the number of traded stocks jumped to 6.6 billion in the third quarter, up from 5.6 billion in the second quarter. This growth is mainly attributed to a 19.2 percent rise in trade volume recorded by the Kuwait Stock Exchange during that period.
The Abu Dhabi-based AMF issues a quarterly bulletin covering developments in Egypt, Jordan, Saudi Arabia, Lebanon, Oman, Bahrain, Kuwait, Morocco and Tunisia stock exchanges. The Arab Capital Markets Database report includes individual indices for each market, as well as a weighted composite index tracking the Middle Eastern and North African bourses.
Established over 25 years ago, the AMF is an intergovernmental regional Arab financial institution. Its main objectives are to assist member countries in eliminating payments and trade restrictions, achieving exchange rate stability, developing capital markets, and correcting payments imbalances through the extension of short- and medium-term loans. The AMF also works to coordinate monetary policies of member countries, liberalize and promote trade and payments, as well as encourage of capital flows among member countries. — (menareport.com)
© 2001 Mena Report (www.menareport.com)
