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GCC Investor Confidence Hits 3-month High

Driven by “a positive shift in the balance of investors’ perceptions” of current regional economic conditions, confidence among international and regional investors towards the Gulf region rose one point to 127.3 in September, compared to 126.3 points the previous month, the UAE-based investment bank said.

“It is very encouraging to see the GCC Index on the rise once again. Investor sentiment towards the region has been consistently improving over the past six months with only one month-on-month drop since April 2009,” said Oliver Schutzmann, Chief Communications Officer of Shuaa Capital and author of the “Investor Sentiment Report.”

Investor sentiment towards the region has been consistently improving over the past six months with only one month-on-month drop since April 2009, he said.

The UAE Investor Confidence Index has gained 0.6 points to 119.4 thanks to higher confidence in the UAE’s current state of economic conditions. The report was based on a survey of 51 members of the investment community last month.

Despite September’s gains, the index was still below the 133.5 level it reached in June, the highest since Shuaa started compiling the index in April.

Bahrain and Kuwait led the overall rise in the index with big gains in investor confidence this month. The Bahrain index jumped 12.8 points to 107.8, while Kuwait’s index rose 9.7 points to 98.5. “However, they still remain the two weakest perceived economies in the GCC, with over half of investors downbeat on the outlook for Kuwait and a third negative on Bahrain,” said Schutzmann. Saudi Arabia’s index increased 3.3 points to 138.7. Qatar and Oman saw their indexes slide 4.6 points and 5.6 points to 135.8 and 115.2 respectively.

“Investors were most positive on the Qatar and Saudi Arabia economy. Some 51 per cent of respondents thought that Qatar’s economy was robust and 41.2 per cent said the economy was favourable in Saudi Arabia, the world’s largest oil producer.

Nearly a third of respondents held a negative view about the UAE, but close to 60 per cent thought that economic conditions would improve there over the next six months.

The Abu Dhabi Stock Exchange was considered the most undervalued.

Confidence for GCC real estate — the worst performing industry out of the eight that were surveyed — was poor, the report said.Some 41.2 per cent of investors were gloomy on the sector.

Fifty-one per cent of those surveyed thought oil and gold prices would rise over the next six months.

Schutzmann said the six-month investor outlook for the GCC economy was relatively unchanged at 54.9 per cent in September. “The region remained very competitive with the BRIC countries and global emerging markets, which recorded figures of 54.9 per cent and 60.8 per cent respectively.”

· issacjohn@khaleejtimes.com