Saudi Arabia saw an increase in investor confidence in May with the Saudi Arabia Investor Confidence Index seeing a significant rise of 8.1 points, moving to 140.1 points from 132 points in April, the second monthly GCC Investor Sentiment Report of SHUAA Capital, the region's leading financial services institution, said on Tuesday. This compares well to the GCC confidence index which saw a more modest increase of 2.7 points to 112 points from 109.3 points in April. “Saudi Arabia is expected by investors to see further improvement in economic conditions over the next six months. 67.6 percent of the respondents signalled that they expected an improvement in economic conditions in the Kingdom, up by over 15 percent on last month. Just 7 percent of investors questioned, expect the Kingdom's economy to be negatively affected,” the report said. Of particular note is that 60.6 percent of the investors polled in May were calling the bottom of the cycle for the Saudi stock market. The DSM in Doha was the nearest with 40.8 percent of investors believing the worst was over. This makes for particularly encouraging reading for GCC stock exchanges given only 31 percent of investors are calling the bottom for the FTSE 100, it pointed out. “An overwhelming 60.6 percent of investors are calling a bottom for the Saudi Stock Exchange (Tadawul), while 21.1% are undecided and 12.7 percent remain bearish. For the Doha Stock Exchange 40.8 percent see the bottom, while 28.2 percent remain undecided and 21.1 percent have a negative view on the stock market. Positive signs are also evident for the Abu Dhabi Stock Exchange with 35.2 percent of investors calling a bottom. Although 43.7 percent are not calling a bottom for the Dubai Financial Market, the majority of investors are either undecided or positive.” The report draws together the submissions from international and regional institutional investors and starts to formulate the GCC Investor Confidence Index. The Index has been designed to provide the global investment community with a benchmark of investor confidence for GCC countries and track changes in investor behavior over time. The SHUAA GCC Investor Confidence Index and the sub-indices for all six GCC countries are derived from an equal weighting of responses to four questions of the GCC Investor Sentiment Survey: current view and six months outlook on economic conditions, current view and six month outlook on equity market valuations. The Index and all sub-indices have a range between 0 and 200. A number greater than 100 represents positive sentiment while a number lower than 100 represents negative sentiment. Commenting on the findings Oliver Schutzmann, chief communications officer of SHUAA Capital and author of the Investor Sentiment Report, said: “Looking at the region as a whole investors felt that economic conditions were more likely to improve over the next six months across GCC markets (60.6 percent) and Global Emerging Markets (59.2 percent) than BRIC nations (50.7 percent). Although we have witnesses a surge in the oil price to over $60 per barrel, 59.2 percent investors indicated that the oil price will rise. For the profitability of GCC companies, investors have pointed to a significant rise across all sectors, including real estate & construction which improved by 15.1 percent compared to last month's survey.” __
