By Soren Billing
Hopes of a swift rebound in business sentiment are dashed with index's decline.
A sharp drop in UAE investor confidence has prompted a decline in Shuaa Capital’s monthly GCC investor confidence index, dashing hopes of a swift rebound in business sentiment.Shuaa’s GCC Investor Confidence Index fell 7.8 percent to 123 points in July as steep falls in the UAE and Kuwait indices weighed on the measure.
The UAE fell 9.9 points to 113.9 points, reversing much of June’s 16.8 point gain, which Shuaa had called a “significant turnaround”.
Similarly, the Kuwaiti index (98.3 points) eased back to below 100 points, marking a return to negative investor sentiment in the country.
Only Oman posted a slight increase, edging up 1.5 points.
“It has proven to be a very challenging month for the GCC economies,” said Oliver Shutzmann, Shuaa’s chief communications officer.
“Much of the decline in the GCC index can be attributed to increased market uncertainty.”
He pointed out that stock markets across most of the GCC remain undervalued in the eyes of investors, although not to the extent of last month.
“Once again, it is the UAE stock markets leading the way, with the Abu Dhabi stock exchange and the NASDAQ Dubai seen to offer the best opportunities for returns according to investors, with both exchanges 26.7 percent undervalued on balance,” he said.
Investors were asked questions about current and future economic conditions, stock markets, sectors and commodities for the survey, which was conducted between 5 and 16 July this year.
As the most transparent country in the GCC with a huge image management machine the UAE has a prerogative to build confidence, not by spin and the usual boasts, but by actions and honesty. The whole world is in the doldrums and below, so there is no shame at not being the biggest, tallest, longest, silliest etc. anymore. If the UAE message factory actually confined itself to the truth with no embellishments it would help the whole region in the slow process of recovery and rebirth. But the persistent and annoying use of spinmeisters to make it up, flower it up and basically fail in their mission will continue to destroy what is left of the UAE's credentials and credibility. Brand Dubai should be about transparency, not pretending the sun still shines.