Meanwhile, the Egyptian stock market has risen to its highest level in three weeks, but it was overall down for the third quarter running amid fears of losses due to current political tensions.
The two stock markets of the United Arab Emirates saw the highest rises in this quarter amid optimism among investors caused by a partial recovery of property prices.
The economy outlook was strengthened by the government spending plans and the success of the tourism sector.
Markets have benefited from speculative trading following the decision by Morgan Stanley Capital International (MSCI) in mid-June to elevate the status of markets in the UAE and Qatar to emerging markets.
The Dubai index was settled in yesterday’s trading, but rose by 21.5% in the second quarter, while the Abu Dhabi index rose by 0.3%, taking second quarter profits to 17.4%, in its best performance since the third quarter of 2009.
Ali Addo, portfolio manager at the First Investor financial company, said: “markets go through an adjustment in the summer and in Ramadan, but a recovery is expected, if the global situation was favorable.”
He added that the good performance in the tourism sector, as well as the possibility of the UAE winning the right to host EXPO2020, in addition to heavy investment in the infrastructure in Abu Dhabi, supported the optimistic expectations in the UAE.
The Qatar index fell by 0.3%, reducing its quarterly gains to 8.1%, although it still remains the best performance of the last nine quarters.
Investors bought blue chip stocks that have not kept pace with their counterparts’ gains in the region, when they rose in the first half of the year. Confidence was strengthened by MSCI’s decision to elevate Qatar to ’emerging market’ status.
The index in Saudi Arabia fell by 0.1%, although the market closed trading up by 5.2%, in its first trading day after the introduction of the new weekend on Friday and Saturday. The market failed to match the profits of other markets in the region due to concerns for the growth in bank and petrochemical shares.
By comparison, the MSCI index for emerging markets lost 9.1% in the second quarter.
In Kuwait, the index fell by 1.8% due to what Fouad Darwish, the director of brokerage at the Global Investment House, described as portfolio adjustments by investors at the end of the quarter.
However, the market rose by 15.6% in the second quarter, due to the activity of individual investors.
In Egypt, foreign investors have raised the index to its highest level in three weeks ahead of anti-government protests. However, trading figures were low, with many investors staying away.
The main index of the Egyptian stock market rose by 1.4%, recording the highest closing figure since 11 June, although its monthly performance was its worst since November 2012.
According to stock market data, buying by foreign investors has been higher than selling, while Egyptian and Arab investors’ trading has generally leaned towards selling. It is noticeable that foreign funds buy Egyptian stocks during periods of political unrest, expecting the market to recover afterwards. However, the low trading figures show that there are very limited numbers of these activities.
Marwan Radwan, Director of International Sales at Pharos Securities, said “investors are staying away and are waiting for the outcome of recent developments, taking into account the possible repercussions of today’s [Sunday] figures.”