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Market Analysis Brief of OIC Member States
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10 fastest growing stock markets of the Muslim
World, averaged market capitalization growth of
99.87% between 2004-2003. Comparatively, the top
10 global stock markets averaged growth of 19.79%.
Posted,
July 20th, 2005
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Dinar
Standard presents the following stock market analysis
brief covering the 27 active stock markets from the
57 OIC member states. The brief analysis provides 2004
year-end key market activity data and compares it with
the leading global markets. A listing of key companies
and
sectors represented is also included.
SIZE
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Total Market capitalization of OIC member country
markets at the end of 2004 stood at US $1,151 billion.
This is based on combined market capitalization of
the 27 active equity markets from the 57 OIC member
countries.
- This
total OIC market capitalization is comparable to that
of the German Deutche Bourse's domestic market capitalization,
which at the end of 2004 stood at US $1,195 billion.
The world's largest stock market, the NYSE's domestic
market capitalization was at US $ 12,708 billion.
GROWTH
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Top 10 markets of the OIC by Market Capitalization
growth averaged 99.87% in market cap. growth between
2003-2004 versus the top 10 global stock markets,
such as the NYSE, Tokyo, and the London Stock Market,
which averaged growth of 19.79%. See Table (1 &
2)
- This
growth needs to be put in perspective of the very
nascent state of many of these markets. Many are self-regulated
and provide various barriers for foreign investment
and strict listing rules. In many of the markets,
the number of listed companies is still very small
for e.g. In 2004, the Dubai Financial Market had only
18 companies listed, while the Abu Dhabi market had
35.
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The Saudi Tadawul Stock Market (with 73 listed companies)
led the markets of the Muslim majority states in terms
of market capitalization ($ 292 billion at the end
of 2004). Its leading capitalized companies were SABIC
(the petrochemical global giant), Saudi Telecom, and
Saudi Electric. It also posted an impressive 85.7%
growth in its market capitalization from the year
before and an 85% growth in its broad market TASI
Index that ended 2004 at 8206.
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Bursa Malaysia, Istanbul Stock Exchange, Kuwait Stock
Exchange, Surabaya Stock Exchange (Indonesia) and
the Abu Dhabi Securities Market represent the other
leading stock markets. See Table for Leading Companies
(TABLE 3)
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Amongst the largest markets, the UAE based stock markets
of Abu Dhabi Securities Market and the Dubai Financial
Market showed the most impressive growth. Dubai Financial
Market's DFM Index posted the largest Index growth
increase of 175% in 2004 to 439 from the year before.
Its market capitalization grew 146% to $36 billion
compared to year before. Meanwhile, the Abu Dhabi
Securities Market boosted its market capitalization
by 83% to $55.48 billion in 2004 compared to the year
before with its broad market index ADSM posting a
75% increase in the same period to 3070.88.
- Khartoum
Stock Market of Sudan, which has 48 listed companies
showed the highest increase of 176% in market capitalization
to $2.05 billion in 2004 compared to the year before.
The KSE annual report attributes this change to listing
of an additional company, The Financial Investment
Bank, and the high demand for its blue chip companies,
Sudatel and Sudanese Free Zones Companies
- Other
markets showing significant gains include the Karachi
Stock Exchange, Dhaka, Karachi, Casabalanca, and even
Palestine. The Palestine Securities Exchange had 26
companies listed in 2004 with a market cap that increased
by 69% in 2004 to 1.09 billion
STOCK MARKET AS ECONOMIC INDICATORS
- A
common gauge of the stock market's significance in
the national economy is its market capitalization
as a percentage of the annual GDP. For the numbers
available for 2003, Malaysia, Kuwait, and Qatar produced
a market capitalization, which was 161%, 143% and
136% of the national GDP's respectively. Comparatively
for example, the London Stock Exchange's domestic
market capitalization represents 137% of UK's national
GDP for 2003.
- OIC
member countries with lower role of stock markets
in the national economy include Bangladesh at 5%,
Kazakhstan at 8%, and Iran at 25%.
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