• GCC stock markets endure dismal third quarter as oil prices and global outlook weigh on markets
  • Saudi Arabia’s Tadawul All Shares Index is down 18.5 per cent over the quarter
  • Other GCC stock markets fell 6-12 per cent over the period

Stock markets across the GCC have suffered from high volatility and sell-offs in the third quarter of 2015, resulting in sharp falls in market capitalisation.

The region’s largest stock exchange, the Saudi Stock Exchange (Tadawul), recorded a 31.8 fall in the Tadawul All Shares Index (Tasi) year-on-year, to 7404.1 points at the end of September.

The Tasi fell 18.5 per cent over the third quarter to trade at similar levels to 2013.

Market capitalisation has fallen SR546.4bn ($145.7bn), or 24.7 per cent, to SR1,667bn over the last year, despite three IPOs in 2015.

Oil prices falling below $50 a barrel and global equity market volatility caused by weak data from emerging markets, especially China, has affected the performance of GCC stock markets. While liquidity and indices usually dip in the third quarter, 2015 has seen exceptionally poor performance with sharp falls in August.

The falls come despite the Tadawul opening up to qualified foreign investors in June. Only 2-3 per cent of trading was by foreign investors in mid-September, and they owned 5 per cent of total market capitalisation on 17 September.

The Dubai Financial Market’s general index dropped 12.2 per cent over the quarter to 3593.3, while the Abu Dhabi Securities Exchange fell 7.8 per cent to 4352.2. The Muscat Securities Market’s MSM30 index fell 9.9 per cent to 5787.7 over the same period, and the Bahrain Bourse was down 6.7 per cent to end the quarter at 1275.9.

The Kuwait Stock Exchange (KSE) general index fell 7.7 per cent between the start of July and the end of September to 5726. The KSE is suffering from declining valuations and liquidity, and a trend of companies delisting due to the poor performance.

The Qatar Exchange was the best performer, with its main index falling just 6 per cent over the third quarter to 11465.2. It was boosted by the news it will be promoted to the London-based FTSE Russell secondary emerging markets index in 2016.

The bearish sentiment in GCC equity markets shows no signs of improving, with oil prices widely predicted to remain at current levels, and fragile global economic growth.

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