Capital inflows to MENA markets hit five-year high: report

DUBAI, June 16 (Xinhua) -- Stock markets in the Middle East and North Africa (MENA) posted in May the highest capital inflows in the post-financial crisis era, said a report released on Sunday by Deutsche Bank's research department.

According to the study by Germany's first lender, last month experienced inflows of 655 million U.S. dollars into the MENA markets, the highest level in five years.

Aleksandar Stojanovski, a research analyst at Deutsche Bank, said the MENA markets have continued to impress analysts with solid performance. "Dubai has advanced by more than 47 percent this year, followed by Abu Dhabi by 39 percent and Kuwait by 35 percent." The sheikhdoms of Dubai and Abu Dhabi belong to the United Arab Emirates (UAE), a major oil supplier.

The influx of fresh new capital coincided with several listed Arab bellwether shares in the MENA region, going up to the highest levels since the outbreak of the global financial crisis in Sept. 2008.

The report added on an aggregate basis, the MENA markets posted around 2 billion dollars of net inflows since the start of this year -- also a record high -- compared with an outflow of 192 million dollars during the same period in 2012. Of the 655 million dollars for May, the Kingdom of Saudi Arabia led the rally with 308 million dollars of inflows followed by Qatar and Dubai with 131 and 129 million dollars respectively.

"For Qatar this is a hat-trick of inflows, which is a major reversal of the trend seen throughout 2011-2012 when some 1.3 billion dollars of foreign funds exited the country," said the report.

On a year to date basis except for Egypt, which is down 14 percent, all the other markets are up with Oman by 16 percent, Qatar 14 percent, Bahrain 13 percent, Saudi Arabia 11 percent and Jordan 3 percent.

Regarding the outlook for the second half of 2013, Stojanovski said the upgrade to Emerging Market status of the UAE and Qatar by global index provider MSCI last Tuesday reflected the confidence of international investors.

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