A barrel of Brent crude may still cost less than $70 but that has not stopped stock markets in the Mena region posting their highest monthly return since 2009.
The Pan Arab Composite LargeMidCap index from S&P leapt 10% in April, a result the index provider attributed to news that the Saudi Arabian regulator would open its stock market to direct foreign investment from qualified institutions on June 15.
"The hope of increased liquidity and capital in the Arab world's largest stock market greatly cheered the region's equities," wrote Tim Edwards, senior director, index investment strategy at S&P Dow Jones Indices, in a statement. "April's 10.1% total return for the index was the highest for any month since the dark days of April 2009."
Stocks in the Mena region fell dramatically at the end of last year as the price of oil plummeted – a scenario blamed on the rapid rise of shale oil production in the US.
The recent bounce-back may be due to a gradual recovery in the oil price, which is still far below its average level in the past few years.
Although the Saudi Arabian market is tipped to perform well once the first direct foreign investments begin, the UAE was the best performer in April, rising 14.5%.
Not every stock exchange in the region rose in April. The S&P index of the Egyptian market fell 5%, which Edwards attributed to the implementation of new regulations on capital gains and dividend taxation.
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