“All the markets are doing pretty well,” says Kuwait-based Global Investment House head of research Faisal Hasan. “At the end of November, all markets were up at least 20 per cent. The correction is finally over. But the days of 100 per cent growth in a year are over. Going forward, the markets will be much less volatile.”

Regional stock market giant, Saudi Arabia’s Tadawul has seen sustained rises since October, pushed by trading in blue chip stocks. The Tadawul All Share Index stood at 9,892 points on 5 December and could reach a 12 month high of 10,000 points by the start of the hajj holiday that begins around 12 December, say analysts.

“The market may go to 10,000 points before it closes for the hajj vacation,” says Riyad Bank head of research Khan Zahid. “People are taking positions. The rally will continue until next week but we could see some profit taking before the market closes.”

The market traditionally rises before the government’s budget announcement expected in mid-December. The index is up 25 per cent since the beginning of the year.

The Abu Dhabi Securities Market general index has outstripped its sister bourse in Dubai and is up 44 per cent since January. The Dubai Financial Market index is up 34 per cent. The markets have been driven by speculative trading in real estate and service sector stocks.

“The interest is coming back to the market,” says the UAE’s Shuaa Securities managing director Mohammed Ali Yasin. “We are seeing a new momentum driven by a number of factors including the last GCC summit and the announcement [regarding retaining the dollar peg], which has put a stop currency speculation. For the rally to continue in the New Year, company results have to meet expectations. Growth in the first quarter of 2008 is predicted to be strong.”

The Kuwait Stock Exchange has dropped month-on-month since October on low volumes and profit taking, but was still up 20 per cent since the beginning of the year on 5 December. “It’s a wait and watch market. There’s no particular reason that investors have been booking profits. Investors are waiting for year-end profit reporting and trading should pick up in January,” says Hasan.

The typically illiquid Bahrain Stock Exchange declined in November but is still up 18 per cent over the course of the year. The Doha Securities Market followed suit and its index dropped in November from a 21-month high of 10,057 points to 9,130 on December 5 but is up 30 per cent since January.