THE BUSINESS TOP 100 COMPANIES
The new order The past dozen months have seen fortunes lost but also, some made. The Gulf, one of the world’s most dynamic economic regions, witnessed a number of changes in the positioning of its top 100 businesses,says Mohammad HAWA.
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or most equity investors in the Gulf, the last year is best forgotten. For some though, it has unveiled new horizons of opportunity. The mayhem in regional equities triggered by the global meltdown in 2008 washed billions of dollars out of the region, and in one fell swoop reversed the notion that Gulf equities were not correlated to world markets.
Taking stock Gulf Cooperation Council (GCC) stocks started to decline in September 2008 as ripples of the impending global recession were felt across the region, affecting investor confidence. The decline in equity markets was compounded by a
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fall in real estate prices. In November, the region’s market capitalisation fell by $127 billion to $595 billion, representing nearly a four-year low. On the whole, GCC markets plummeted 56 per cent in 2008. The Gulf’s MSCI index, which measures stock funds, fell sharply by 57.5 per cent from the end of August 2008 to the trough on March 3, 2009. Technology stocks were the hardest hit. Although returns were negative across the board, healthcare and consumer staples emerged as the defensive sectors. Beginning 2009, GCC markets lost 10 per cent in the first quarter, before rebounding 27 per cent in the second quarter. The gains were fuelled by
a spike in crude oil prices and a rise in the Dow, Nasdaq, FTSE, S&P 500, Nikkei and emerging market indices. Total market capitalisation rose 18 per cent in the second quarter on renewed investor sentiment.
Rebound on global cue In April this year, economists and governments across the world signalled that the worst was probably over. Taking a cue from this, GCC stock markets started to rebound faster than expected, especially led by high-beta, technology, telecom, industrials and consumer stocks. Gulf markets have recovered with the MSCI GCC gaining 30.5 per cent year to date compared with an in-