Investor confidence in the GCC countries increased 3.8 percent, according to SHUAA Capital's GCC Investor Sentiment Report in October released on Monday. The only report of its kind for the Gulf markets, the survey draws together the submissions from international and regional institutional investors to formulate the SHUAA 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. Oliver Schutzmann, chief communications officer of SHUAA Capital and author of the Investor Sentiment Report, said: “It is very encouraging to see the GCC Index on the rise for the third month running, and not far off its peak of 133.5 in June. The GCC real estate, construction & materials sector improved dramatically, turning positive for the first time since April 2009 after a significant jump from -13.7 percent to 13.7 percent of the balance of investors expecting a rise in profitability. On investor sentiment toward the current state of GCC economies, Schutzmann said: “The continued improvement in the GCC Investor Confidence Index was largely driven once again by the positive movement in the balance of investors' perceptions of current regional economic conditions. In October this figure moved to 27.5 percent from 15.7 percent last month and a significant improvement on July's recording of -15.0 percent in July.” “Performing particularly well this month was the Saudi Arabian Investor Confidence Index which jumped the most, increasing 11.6 percent to 154.9. The Kingdom has performed consistently well in the Survey's seven-month history, and is once again leading the way in the region. Driving Saudi's gain was investors' opinion of the current state of its economy, which doubled in this month's report to 51 percent from 25.5 percent in September. On the regional stock markets' performance, Schutzmann said “This month we asked investors if they would call a bottom in the various regional and global stock exchanges. They responded favorably towards the GCC markets, in particular Saudi Arabia's Tadawul which had an on balance figure of 35.3 percent. Saudi Arabia's economy will regain lost ground next year spurred by higher oil prices and strong domestic growth but unemployment, legislative reform and dependence on oil revenues remain concerns, Morgan Stanley said in a research note. Non-oil output in the Middle East's largest economy is expected to grow 3.6 percent next year and 4.7 percent in 2011, and higher oil prices will boost external balances, the US investment bank said in a note. “Saudi Arabia has managed to weather the global economic downturn and its near-term outlook remains positive,” the note said. The Kingdom's economy is a key driver for the region's growth owing to its status as the world's largest oil exporter. It's also seeking to play a more important role in the global economy through its membership of the Group of 20 Nations. Also performing well was the Abu Dhabi Stock Exchange, Qatar Exchange and Oman Stock Market, which had on balance figures of 17.6 percent, 13.7 percent and 7.8 percent respectively. Meanwhile, the same could not be said for global exchanges; the Dow Jones, FTSE and Eurostoxx all had a negative balance figures.” The balance of respondents indicates, for instance, the difference between the percentage share of investors that are positive and the share of investors that are negative on overall economic conditions.
