Qatar, Oman markets post growth in 2011

Qatar and Oman stock markets were the only two markets in the Arab region that managed to stand strong in the 2011 equity market.

“2011 was a difficult year for investors. Equities generally performed poorly, while bonds and commodities were extremely variable,” a QNB Capital analysis said.

Most Arab markets performed poorly, with Egypt posting the worst result, down 49 percent. Saudi Arabia and Palestine had the smallest declines, both around 3 percent, because their economies are somewhat decoupled from wider trends. Only Qatar and Oman saw positive growth over the year, although it was only very slight, 1.1 percent and 0.3percent respectively, the research note said.

The year began with a degree of measured optimism about the global economy, which had partly recovered from the 2009 recession. There were widespread expectations of steady growth in most economies, albeit at a lower trend than before the financial crisis. As a result, many equity markets had climbed back nearly to their levels in autumn 2008.

The first factor to disturb the outlook was the onset of the Arab Spring in parts of the Middle East. This had a regional impact, depressing stock markets, as well as a global impact through higher oil prices.

Oil was one of the best performing assets, with Brent crude up by 13 percent at the year end, and by over 25 percent at its peak in April. The Japanese tsunami was another shock to the global economy, although its impact proved to smaller and more localized than was initially feared.

Spooked by popular uprisings, EU debt crisis and fragile US economy, Mena stock market lost more than $100bn or 10 per cent in value in 2011, Zawaya.com data said. Egypt, one of the regional favorite for foreign investors, was the worst hit, losing more than 40 percent of its market value on worries about political instability.

The region’s overall volume contracted sharply last year as Qatar and UAE-two of the more active regional markets-failed to win upgrade to emerging market status from global Index MSCI.

On Thursday, as the trading for the first week of the year 2012 closed, Qatar’s stock index crossed the 9,000 mark. With a 21-point jump, Qatar Exchange’s 20-share index peaked at 9,019.