The latest GCC Fund Market Insight Report from Lipper has revealed that equity funds registered for sale in GCC markets moved into positive territory for the first half of 2009 (YTD June 30) recording an increase of 21.14 per cent.

Compared with the 12.55 per cent loss in the corresponding period in 2008, almost all Lipper equity categories finished H1 2009 in positive fashion, with emerging markets such as Russia, Indonesia and utility funds gaining 70.77 per cent, 60.16 per cent and 58.97 per cent respectively. In contrast, funds invested in Germany weighted-down overall performance – decreasing 2.32 per cent.

Rebounding strongly in line with improving market conditions, bond funds were up 10.39 per cent over the second quarter and registered a 6.70 per cent rise year to date, which compared favourably with the first quarter of 2009, which witnessed a negative performance of 3.37 per cent.

GCC-domiciled funds revealed similar results, with funds invested in emerging markets and sector-based funds, such as information technology and natural resources, leading the way.

Islamic funds registered for sale in the GCC underperformed their conventional peers during the first half of 2009, gaining only 4.68 per cent some 11.35 per cent behind conventional funds, which returned 16.03 per cent.

Equity was the best performing asset class gaining almost 10 per cent due mainly to the robust results from Emerging Markets Global and Emerging Markets Asia, which both increased by over 40 per cent. Real estate funds and money market funds both lost 6.62 per cent and 1.69 per cent respectively, while Kuwaiti money market funds suffered an average 11.11 per cent decline mainly due to the depreciation of the Kuwaiti Dinar against the US Dollar.

The five Lipper Islamic Indices confirmed these trends, with the Islamic Equity Funds Index headlining with an improved return of 11.40 per cent to the end of the first half.

“GCC markets outperformed developed markets but underperformed other emerging markets. News at corporate level (the disclosures of payment defaults by Saad Group and Ahmad Hamad Algosaibi & Bros) and at macro-economic level (confirmation of a lighter GCC monetary council) contributed to accrued uncertainties in the market. However, the market should stabilise itself with the acceleration of government spending programmes which should benefit the whole region,” stated Dunny Moonesawmy, Lipper’s head of Research for the Middle East.-TradeArabia News Service