Regional equity funds bounced back into the black in the first quarter of the year after a negative start and share issues also improved.

The first quarter GCC Fund Market Insight Report from Lipper, a Thomson Reuters company, revealed that equity funds gained 3.93 per cent compared with a fall of 7.54 per cent in the same period last year.

Of the 73 equity categories, 53 ended in positive territory, largely due to a rebound in March which offset the fall in January.

Funds investing in the emerging markets of the Philippines, Malaysia and Thailand recorded returns of 13.13 per cent, 12.10 per cent and 11.82 per cent respectively.

GCC market targeted funds improved their position in the rankings.

Equity Saudi Arabia rose 10.9 per cent, Equity Kuwait finished up 8.39 per cent and Equity GCC up 8.27 per cent.

By contrast, funds investing mainly in the UAE recorded a quarterly return of 2.44 per cent.

Out of the GCC domiciled funds, those invested in the GCC and, particularly the banking and finance sector, gained 11.66 per cent on average.

Funds invested in European equities recorded the worst performances.

IPO activity in the Middle East and North Africa picked up during the first quarter of this year, with $427.6 million raised by seven companies compared with just $83.6 million in the same quarter last year.

Saudi Arabia accounted for 65 per cent of the total amount raised.

The 207 Sharia-compliant funds registered for sale in the GCC and listed by Lipper gained 4.01 per cent during the first quarter compared with a minus 4.47 per cent return for the same period last year.

Equity funds were the best performers gaining 6.40 per cent, while mixed asset funds rose 2.74 per cent.

The worst performers were real estate and money market funds which lost 2.96 per cent and 0.51 per cent respectively during the period.

'The GCC market started the quarter in negative territory, however, signs of recovery soon developed and by the end of the quarter all markets were seeing a revival, backed by a reallocation of investments into riskier assets,' said Lipper research analyst Merieme Boutayab.

'The GCC is entering a new era of monetary and financial innovations,' said Lipper head of Middle East research Dunny Moonesawmy.

'While the region is strongly linked to oil and gas production, it has been looking for ways to diversify its economies.

'Many of the member states are still affected by the real estate crisis. This learning curve has resulted in innovation and maturity in the decision-making processes.'-TradeArabia News Service