August has been a very disappointing month for the financial markets of the Gulf Cooperation Council, with severe drops in value traded and in volume traded.

Dubai, Abu Dhabi and Oman fell 11-12%, Qatar dropped 10.5%, Kuwait and Bahrain lost 3.75%, with a sharp drop in value and volume, and only the Saudi market managed to show a very slight rise. The sharpest drop was in Abu Dhabi, down 58% in volume and 55% in value.

Dr Gil Feiler of business consultancy IPR Middle East Ltd. noted that the poor market results went beyond the seasonal drop expected in late summer, and explained that stocks were affected by specific developments within key sectors. Dr. Feiler, who will be delivering a lecture on the GCC Markets in the MidEast/Africa CemenTrade conference in the UAE in October, highlighted the real estate sector in Abu Dhabi, which dropped 21% in August.

Edo Harel of IPR stated that the long term outlook for the Gulf markets remained promising. “The markets have been making progress towards an improved regulatory environment, greater participation by foreign investors, and better transparency. A move away from traditional family-owned and operated companies towards a hired professional management is discernable.”

“In discussions with key local figures, it is apparent that poor results such as those seen in August are serving to spurn them in taking action towards more developed markets. It was because of the recent adoption of measures encouraging foreign investors and requiring increased transparency that the Saudi market actually rose 0.2% this month, marking a sharp change of direction after a decline of over 20% since the beginning of the year.”