Shuaa starts GCC investor confidence index

So Shuaa's starting a regional investor confidence report and index. In-tuh-resting.

The first round of the report, based on a survey of 111 institutional investors between April 1 and 9, shows that, among other things, investors really like Saudi Arabia. Assessing overall economic conditions, 33 per cent gave Saudi a positive rating, followed by 23 per cent for Qatar and 14 per cent for GCC countries overall. For the UAE, 7.2 per cent were positive and 56 per cent were negative. That might sound bad, but Kuwait came in much lower on the scale: only 2.7 per cent of investors said they felt positive about the economic outlook there - not surprising, for obvious reasons.

Other things the first survey found:

• The UAE and Kuwait tied for most negative economic outlook in the next six months. Over 22 per cent of investors said they expected economic conditions to decline in these countries in the coming months. It should be noted, however, that over 34 per cent said conditions would improve in the UAE; the number was 25.2 per cent for Kuwait, still higher than the percentage who saw economic conditions as worsening.

• Investors have better expectations for GCC countries than they do for global emerging markets or for the so-called BRIC emerging markets. More people give positive ratings to GCC countries than emerging markets overall on economic expectations, expected stock-market performance in the next six months and as a destination for new investment.

• 64.9 per cent of those surveyed said oil prices would rise in the next six months. At the same time, 49.5 per cent said the value of the US dollar would fall.

• Negative sentiment outweighs positive sentiment for the profitability of all but two sectors: telecoms and pharmaceudicals. 55.9 per cent expected property company profitability to fall.

The investor confidence report, which Shuaa says is the first of its kind in the region, is to come out monthly from now on. An investor confidence index is also in the offing, but Shuaa isn't yet saying what the methodology is going to be.

Oliver Schutzmann

, Shuaa's investor relations head, told me in an e-mail today that the index is "likely to indicate the balance of responses", which shows "the difference between the percentage share of investors that a[re] positive and the share of investors that have a negative view on overall economic condition."

(Photo: Oliver Schutzmann, head of investor relations at Shuaa Capital; supplied.)