GCC Equities: Still Bearish Despite Short-Term Bounces

Progress in the US towards a bailout of ailing financial institutions seems to have halted recent slides in GCC equity markets but we retain our bearish stance towards the region for now (with the possible exception of Saudi Arabia). Indeed, we caution that the recent bounces could turn out to be short term in nature and note that almost all EM equity markets have reacted similarly to the US news. Regional fundamentals have not altered: inflation in GCC states remains highly elevated, continuing to eat into company profits; liquidity in the banking sector has dried up; and although the global

To read the full article, please choose one of the following options: