The GCC states saw a marked increase in investor confidence during June with the UAE leading the region, according to a new study.

The GCC Investor Sentiment Report issued by Shuaa Capital, a leading financial services institution, said the UAE index witnessed the highest increase in investor confidence, rising by 16.8 points from 107.0 points to 123.8 points month on month.

The GCC Investor Confidence Index saw a 14.1 point jump, rising from 119.4 points in May to 133.5 points in June.

The highest investor confidence score in June was achieved by Qatar with 141.6 points which has taken the lead across all GCC markets, slightly ahead of Saudi Arabia which remained unchanged at 139.9 points.

Oman saw the Index rise by 13.1 points and now stands at 117.7 points. Both Bahrain (up from 96.8 in May to 109.8 points in June) and Kuwait (up from 87.3 points in May to 103.1 in June) are out of the doldrums and are beginning to see the return of investor confidence, it said.

The report draws together the submissions from international and regional institutional investors and formulates the index. The index is the only benchmark of investor confidence in the region and has been designed to track monthly changes in investor behaviour over time for all six GCC countries, said a statement.

Commenting on the findings Oliver Schutzmann, chief communications officer of Shuaa Capital and author of the Investor Sentiment Report said: “The United Arab Emirates saw a massive improvement in investor confidence in June. The investor opinion on the UAE economy has improved considerably with only 12.4 per cent of all investors holding a negative view on current economic conditions compared to 36.6 per cent in May and 48.6 per cent in April. The six-month outlook also improved strongly with 51.7 per cent of all investors expecting the economy to improve, up from 26.8 per cent last month and 11.7 per cent in April.

“The GCC Investor Confidence Index followed closely behind, rising 14.1 points from 119.4 points in May to 133.5 in June. Views on the GCC’s economies have seen a turnaround whereby 16.9 per cent of all investors see current economic conditions as positive in June, compared to 9.9 per cent of experts indicating negative economic conditions in May. A significant number of investors believe that GCC markets will improve over the next six months with 70 per cent of respondents having a positive outlook compared to 64.4 per cent for BRIC countries and 61.1 per cent for Global Emerging Markets. This is unsurprising given the fact that 40.4 per cent of all respondents expect a further rise in oil prices over the next six months,” he said.

“Investors indicated that all GCC stock markets are undervalued, particularly the United Arab Emirates, while the Dow Jones Industrial Average, the Eurostoxx 50 and the FT-SE are all seen as overvalued by the majority of investors. Whereas 39.3 per cent believe that the Abu Dhabi Stock Market remains an undervalued market, the majority of all respondents have suddenly become bullish on the Dubai Financial Market with 21.3pc of the balance of survey participants seeing it as undervalued, compared to only 2.8pc in May. Nasdaq Dubai also recorded 19.1pc of investors saying that its stocks are undervalued.

Looking ahead six months, 49.4pc of respondents see Saudi stocks rising, 44.9pc expect the same for Abu Dhabi stocks, 46.1pc for Doha stocks, 31.5pc for Omani stocks and 25.8pc expect stocks listed on the Dubai Financial Market to rise.

“Of special interest this month was the question of whether investors were calling a bottom for the real estate sector. Investors believe that most GCC countries have not seen the floor yet with the exception of Saudi Arabia, where 37.1pc of respondents have called the bottom, 28.1pc are undecided and 19.1pc are still negative on the real estate sector, adding up to a positive balance of 18pc of a