Market performance in the region for the second quarter was nothing if not mixed. From the highs of Dubai and Abu Dhabi to the lows of Libya and Egypt.
Taking stock of mixed fortunes for Middle East bourses
Damascus Securities Exchange
Syria's bourse was the best performing Arab stock market in the second quarter.
The market's performance was largely attributable to a plummeting currency that has forced investors to pile their money into stocks as a hedge.
The drop in the Syrian pound, the world's steepest currency decline this year, has prompted Syrians to look for alternative methods to maintain the value of their assets amid restrictions on foreign currency and remittances abroad.
The Damascus Securities Exchange General Index has risen 44.7 per cent in the second quarter.
Dubai Financial Market
Dubai's shares have benefited from foreign investor interest in the lead-up to the market's upgrade to "emerging market". The market was previously classified as a "frontier" market by the international index provider MSCI.
Emaar Properties led the rally in the second quarter amid an improvement in the emirate's property sector as asset prices and rents show a marked rise.
The Dubai Financial Market General Index has risen 21.5 per cent in the same period.
The emirate's benchmark was the second-best performing Arab index after Damascus.
Abu Dhabi Securities Exchange
Abu Dhabi also benefited from renewed investor appetite in the lead- up to the MSCI upgrade of the UAE stock markets.
Shares listed on the capital's stock market came in second place after Dubai stocks.
Property firms outperformed other sectors following the merger of the capital's biggest developer Aldar Properties and Sorouh Real Estate.
Aldar's shares surged 59.6 per cent in the second quarter.
The Abu Dhabi Securities Exchange General Index rose 17.3 per cent in the same period.
Kuwait Stock Exchange
Kuwait's index rose 15.6 per cent in the quarter, driven by small and mid-cap companies amid expectations of the start of heavy infrastructure spending in the fourth quarter.
"When you look at the big companies, Zain, the banks, they are not doing well at all," said Fadi Al Said, the head of equities at ING Investment Management in Dubai.
"But the market is being driven by two things. Firstly, the beta effect from regional markets doing well. Secondly, that these infrastructure projects will see some acceleration in Q4 and money will start filtering to the economy faster and expectations of balance sheet growth for the banks."
Bahrain's index rose 8.8 per cent in the second quarter as it sought to catch up with leading Arabian Gulf markets. "It has been an under-performer, lagging behind its GCC counterparts for a long time," Mr Al Said pointed out.
The QE Index jumped 8.1 per cent in the second quarter ahead of Qatar's classification upgrade to "emerging market" by the index compiler MSCI in June. The country was previously considered a "frontier market". It will have a 0.45 per cent weighting in MSCI's emerging markets index, with managers benchmarking their index in stocks such as QNB, IQ and Industries Qatar.
Oman Securities Market
Oman's MSM 30 Index rose 5.8 per cent during the quarter amid analyst expectations of healthy growth among industrial and investment holding companies.
"We expect MSM30 companies to post double-digit growth in first-half earnings led by signs of steady revenue growth and margin expansion in the industrial sector," said Kanaga Sundar, the head of research at Gulf Baader Capital Markets in Muscat.
"The net profit of industrial sector firms is estimated to increase 50.8 per cent year-on-year in the first half of this year, to 46.58 million Omani rials (Dh445.6m), on margin expansion and strong performance of sector majors such as cement, construction and commodity players," Mr Sundar said.
Saudi Arabia Stock Exchange
The Tadawul All-Share Index rose 5.2 per cent in the quarter, as dividend yields impressed investors and the banking sector reported strong growth from higher lending activity.
Saudi Arabia has experienced "a rally that was supported by very strong fundamentals", said Rami Sidani, the head of Schroder's Middle East and North Africa desk. "Corporate earnings in the first quarter came in strong. The banking sector, which is the perfect barometer for the economy, posted strong financial results. At the same time, Saudi Arabia gives a very compelling dividend yield, at 5 per cent, ranking it among the highest in Arabian Gulf countries."
Khartoum Stock Exchange
Sudan's index declined 0.7 per cent in the quarter, as the country's currency significantly lost its value against the dollar in the black market after the South cut oil flows.
"In the case of Sudatel, because the shares are denominated in UAE dirhams and the Sudanese pound, and its financial statements are in dollars, we did see an effect on the price," said an investor who spoke on conditions of anonymity.
Sudan's stock market is still nascent; it upgraded its trading system to an online platform only last year. In the past, scribbles would be made on white boards indicating the buying and selling of shares.
Iraq Stock Exchange
The Iraq Stock Exchange declined 2.1 per cent in the second quarter, adding to losses made since last year, as investors sold shares amid a deteriorating security situation.
The declines are despite a successful IPO by Asiacell, one of the country's biggest telecoms operators, in the previous quarter.
The rising numbers of attacks in Baghdad and elsewhere have worried investors, who prefer to keep their money where they can see it.
Tunisia Stock Exchange
Tunis was ranked second among Arab countries after Saudi Arabia for the number of initial public offerings that took place over the past 12 months. But the country's worsening political stability ahead of expected elections has triggered a 2.4 per cent drop in the index over the second quarter.
"There is a clear deterioration of security on the ground," said Sebastien Henin, a portfolio manager at The National Investor in Abu Dhabi. "Meanwhile, investors are watching and waiting. So the mood is bad despite that fact that seven companies went public this year."
Morocco Stock Exchange
Morocco's stock market declined 2.7 per cent in the quarter as the economy showed further signs of deterioration because of its dependence on European debt-ridden economies and after MSCI, an international index compiler, downgraded its classification of the North African country to a "frontier market". "The financial results for listed companies last year were released at the end of the first quarter of this year, which showed results were below consensus, with an average drop of 10 per cent in net income," said Mr Henin. "The removal of Morocco from the MSCI emerging markets index at the start of June has also sent a wrong message to the local financial community. This is significant because the country has been part of the index for more than a decade."
Palestine Securities Exchange
Shares listed on the Palestine Exchange declined 4.3 per cent in the second quarter as companies paid out dividends to shareholders.
Dividend yields of local companies averaged 6.43 per cent for last year, the highest among Arab countries. The decline is also related to Egypt's crackdown on smuggling tunnels, that connect Gaza to Sinai, a campaign that began in March this year.
In June, MSCI set up a standalone Palestine index, that includes four listed companies: Paltel, Bank of Palestine, Padico Holding and Wataniya mobile.
Beirut Stock Exchange
Lebanon's stock market declined 4.4 per cent in the second quarter amid low liquidity, lack of investor interest and a stagnating economy.
"There's very low turnover," said Nassib Ghobril, the chief economist at Byblos Bank in Beirut. "At the same time there's only 12 companies listed."
The Beirut-based exchange has not added a new listing since 1998.
There has been unwillingness from the government and family- owned businesses to list their assets to ignite interest in the market, Mr Ghobril said. The economy has been significantly affected by consumer confidence and investor sentiment. The two have been affected by domestic security breaches, Mr Ghobril said, such as car bombs and violent spillover from the Syrian turmoil.
Amman Stock Exchange
Jordanian stocks declined 5.7 per cent in the second quarter, as the country's economy braced for further turbulence amid mounting costs as Syrian refugees are hosted.
"The political scenario in Jordan is boiling," said Tariq Qaqish, the head of asset management at Al Mal Capital in Dubai. "Prime minister Abdullah Ensour is trying his best to reduce deficit, but without support from the international community it's going to be a very difficult task, because everything is going back on the shoulders of the people. They are paying the taxes to support the economy."
Egypt's economy continued to deteriorate in the lead-up to the removal of the Islamist president Mohammed Morsi from power. The ongoing protests led the EGX 30 Index to decline 6.8 per cent in the second quarter. The country has struggled to secure its much-needed $4.8 billion loan from the IMF to settle its balance of payments. Last week, the fund's deputy spokesman William Murray told Reuters that the IMF would resume talks over the financing facility only once Egypt's interim government wins recognition from the international community.
Libyan Stock Market
The country's stock market has declined 8 per cent in the last quarter amid a deteriorating security situation, dampened investor confidence and low liquidity on the nascent bourse, said a broker who did not want to be named. There has been a spate of attacks on diplomatic missions in recent months. The embassies of France and Tunisia have both been subjected to violence. Last week, the UAE embassy became the latest victim to suffer among foreign diplomatic missions in the North African state after a rocket-propelled grenade was directed into the building.