The 2014 turned out to be a positive year for Middle Eastern equities despite Q4 oil price drag,” Tim Edwards, Senior Director, Index Investment Strategy, S&P Dow Jones Indices, said.
“The markets of the oil-producing countries have endured a horrible final quarter, and December provided little respite. The price of oil continued to grind down (WTI Crude Oil is below U.S. $53 per barrel at time of writing) and it has pulled the regional equity markets down with it.
“However, and largely due to meteoric rises over the summer months, the record books shall none-the-less recall 2014 as a positive year for Middle Eastern equities.
“The S&P Pan Arab Composite LargeMidCap delivered a total return of close to 3% for the year; it would have delivered a negative return were it not for the supportive performance of the Financials sector, which contributed over 4% to the total. The Materials sector was best avoided; it contributed negative 2.6%.
“A majority of single countries posted gains this year. Special mention is due to Egypt, Qatar, the U.A.E. and Turkey, each of which saw double-digit returns from their equity markets in 2014. These positive performances are even more impressive given that they are expressed in U.S. dollar terms; the dollar has appreciated significantly this year.
“Elsewhere, the U.S. markets closed the year just below the new highs made on Monday and – noting the importance of the U.S. dollar’s strength in their reports – in the final analysis both Japan and Europe posted losses for the month, quarter and year.
“U.S. Treasury bond yields were unsteady over month, each of our fixed income indices closed December for a small loss for the month and a solid total return for the year.
“The S&P GSCI index of broad commodities had its worst year since 2009, losing close to a third in value. Gold has had an indifferent year; it closed up by 2% on the month.”