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DFM shows strong performance in region

The Saudi Stock Exchange (Tadawul) recorded the highest decline in performance with a 52.5 per cent drop. This was followed by the Palestine Securities Market with a fall of 46.4 per cent, and by the Dubai Financial Market (DFM), which declined by 44.4 per cent. In contrast, the Morocco Stock Exchange rose by 71.1 per cent, the Tunis Stock Exchange by 40 per cent and the Oman Securities Market by 14.5 per cent.

The combined market capitalisation of Arab stock exchanges declined by 31.3 per cent to reach $888 billion at the end of 2006 compared to $1,293 billion at the end of 2005. The market capitalisation of seven Arab stock exchanges declined, and for eight others it increased. The largest declines were experienced by the Saudi Stock Exchange, with a 49.4 per cent fall, followed by the Abu Dhabi Securities Market (ADSM), which declined by 39 per cent. The Moroccan and Lebanese stock exchanges fell by 81.2 per cent and 68.9 per cent respectively.

Despite the DFM's capitalisation falling by 24.1 per cent, the bourse still constituted nearly 10 per cent of the total market capitalisation of Arab stock exchanges. It was ranked fourth in terms of size, after the stock exchanges of Saudi Arabia, Kuwait, Cairo and Alexandria.

Measured by the number of new company listings, the DFM topped the Arab stock exchanges with a 53.3 per cent increase in 2006 over the previous year. The number of listings on the Palestine Securities Market rose 17.9 per cent. The DFM was characterised by higher levels of liquidity than other exchanges and this was a major factor in attracting distinguished securities, the DFM report said. However, on the Cairo and Alexandria stock exchanges the number of listed companies dropped by 19 per cent.

The value of traded shares in Arab stock exchanges rose by 17.4 per cent during 2006 compared to 2005. The DFM ranked second in terms of the value of traded shares, constituting 5.6 per cent of the total trading value of Arab stock exchanges. Saudi's stock exchange ranked first, accounting for 83.3 per cent of total trading of all the Arab bourses.

The number of shares traded in Arab stock exchanges rose by 52.1 per cent in 2006, with the number of traded shares increasing in all Arab stock exchanges — except in Kuwait, Palestine and Morocco. The number of traded shares on the DFM accounted for 23.5 per cent of the total number of shares traded in Arab stock exchanges. The Saudi stock exchange topped the list with 32.3 per cent of the total number of traded shares.

The ratio of the number of traded shares on the Kuwait Stock Exchange to the number of traded shares in Arab stock exchanges dropped 22.3 per cent during 2006 compared to 47.1 per cent in 2005.

The turnover ratio of Arab stock exchanges, an indicator of market liquidity, increased from 112.4 per cent in 2005 to 193 per cent in 2006. The Saudi stock exchange recorded the highest turnover ratio of 429 per cent, followed by the DFM with 109 per cent and the Jordanian stock exchange with 73 per cent. However, in Kuwait the turnover ratio of the stock market fell from 78.5 per cent in 2005 to 56.4 per cent in 2006. And in Oman this indicator fell from 71.5 per cent to 17 per cent.