GCC-domiciled equity funds gained 3.93 per cent in the first three months of 2010 compared with a fall of 7.54 per cent in the same period last year.  

Of the 73 equity categories, 53 ended the first quarter in positive territory, due largely to a rebound in March which offset the fall in January, according to GCC Fund Market Insight Report from Lipper, a Thomson Reuters company.

Funds investing in the GCC improved their position in the rankings. GCC-domiciled funds investing in the region’s banking and finance sector gained 11.66 per cent on average during the first quarter.

For example the Equity Saudi Arabia fund rose 10.9 per cent, the Equity Kuwait fund increased 8.39 per cent and the Equity GCC fund by 8.27 per cent.

By contrast, funds investing mainly in the UAE recorded a quarterly return of 2.44 per cent.

Funds invested in European equities recorded the worst performances.

NBK Capital Kuwait Equity fund was the best performing fund in the first quarter of the year, increasing 23.05 per cent during the period.

IPO activity in the Middle East and North Africa picked up during the first quarter, with $427.6m raised by seven companies compared with just $83.61m in the same period in 2009. Saudi Arabia accounted for 65 per cent of the total amount raised.

The 207 sharia-compliant funds gained 4.01 per cent during the first quarter compared with a negative 4.47 per cent return for the same period last year.

“The GCC market started the quarter in negative territory, however, signs of recovery soon developed and by the end of the quarter all markets were seeing a revival, backed by a reallocation of investments into riskier assets,” says Lipper research analyst Merieme Boutayeb.