Performance of the GCC Stock Market in the past 10 years Financial Institutions Laila AlOmran 200900296 Hind AlEssa 200900886 Bodour AlShaikh 200900334

Outline Introduction Trends for the last ten years The Oil Price factor and other drivers of Fluctuation Conclusion

Introduction Main Point Understanding performance of GCC stock market for the last ten years can help potential investors understand activities and trends of stock markets and make sense of possible activities in the future Until 2005, GCC stock market experienced extraordinary growth in its stock markets and economies GCC states have poor historical records of their stock markets performances

Trends for the last ten years 2003 GCC experienced tremendous growths in their stock markets. Analysts observed that these rapid growths resulted from rising oil prices, increased corporate profits, and enhanced reforms 2001-2005 The Saudi Arabia stock market (Tawadul index) grew by nearly 540 percent. In the same period, Kuwait stock market also grew by 560 percent as Dubai stock market also experienced an increment of 1024 percent. 2006 All GCC countries faced losses due to declining oil prices and introduction of stringent disclosure rules.

Cont, 2005-2011 GCC stock markets have generally shown a declining trend followed with depressed states Saudi Arabia market leads GCC stock markets in these downward trends. 2008 Oman and Kuwait experienced the highest growth in value trade 2008-2009 UAE markets were the most affected by the financial crisis. Consequently, Dubai financial Market lost 72.4 percent while Abu Dhabi Securities Exchange lost 47.5 percent.

Cultural preference GCC Citizens prefer investing in IPO rather than trade in secondary market stocks therefore IPO prices have increased as a result of high demand.

Global Financial Crisis mostly affected Investment companies. The global financial crisis made it difficult for many companies to find other resources for servicing their foreign debts This was because local banks could not cope with sudden increments in demand for corporate loans Local banks did not want to lend during unstable market conditions. At the same time, foreign banks lacked liquidity. Consequently, most corporate investment companies could not pay off or rollover their matured debts

The Oil Price factor and other drivers of Fluctuation increasing oil prices have favored robust stock markets in the region. However, drops in oil prices from 2005 to 2008 have created volatile conditions in GCC stock markets Market performances do not always move alongside economic fundamentals. This is because others factors like news and changes in market sentiments among others play significant roles in controlling market conditions

Conclusion Until 2005, GCC stock markets have experienced rapid growths due to favorable oil prices, low interest rates, and growths in corporate profits and enhanced reforms in stock markets. The past ten years have seen some dramatic and volatile stock market conditions. These resulted from the decline in oil prices, rising interest rates, investors apathy, liquidity in markets and political instability.

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