To say it was a tough first half for the global economy would be an understatement. It was practically torrid as markets vacillated to market-moving news which were, for the most part, grim.
On more than a few occasions, the European Union bloc threatened to implode with a series of nerve-wracking elections and new faces that seemed determined to undo the fragile negotiations weaved by their predecessors to keep the fragile entity together.
Elsewhere, the United States fared poorly with uninspiring job growth and a deadlocked political environment. Worse, even the stalwart BRIC -Brazil, Russia, India and China - saw growth sputter and their economic environments deteriorate.
Even the relatively insulated safe havens in the Middle East could not escape the doom. Initially, the regional markets made a valiant start to shrug of global economic weakness and did well till the first quarter, before losing their nerve by the second quarter and joining the global economic gloom.
IMF chief Christine Lagarde summed up the global economic mood: "This crisis does not recognize borders. This crisis is knocking at all our doors. For make no mistake: This is a global crisis," she told an audience in Tokyo.
The IMF's updated assessment of the world economy - to be released eight days from now - will highlight that the global growth outlook will be somewhat less that was being anticipated just three months ago. And even that lower projection will depend on the right policy actions being taken.
"A combination of the persistence of the euro area debt crisis alongside the lagged impact of last year's monetary tightening in emerging markets has caused global business confidence to turn lower," says Julian Callow, an analyst at Barclays Capital in a report.
"In turn, this constitutes downside risks to our global GDP projections for the second half. Already this week, our U.S. GDP projection has been trimmed for 2012 to 2.2%, compared with 2.4% previously, and to 2.1% from 2.5% for 2013), based mainly upon more cautious behaviour now expected of the U.S. business sector, resulting from financial market volatility and concerns about Europe."
In light of these grim developments, the stock markets that orbited around their domestic issues fared much better than those that were connected to the global economy.
"The start of 2012 saw a major comeback by the bulls," noted NBK Capital. "Markets across the globe began to rally, and financial woes seemed to be a thing of the past. However, toward the second quarter of 2012, global issues began to resurface, pushing several markets down.
DUBAI TOP PERFORMING GULF MARKETDubai was the second best performing market in the region in the first half, rising as much as 25% earlier in the year, but saw much the gains wiped out by the second quarter.
Some of its key sectors such as real estate, tourism and retail fared well, while Dubai Inc. companies made steady progress in working through their debt issues. But the market was side-swept by global fears and lost most of their gains.
Source: Zawya.com
Other Gulf markets fared poorly despite a great start. Like Dubai, the Saudi Tadwaul peaked at 23.57% by April, but steadily fell back to post a 4.9% growth by the end of the first half, Zawya data shows. The market lost much of its steam primarily due to global economic fears and oil prices falling from their triple-digit perch in the second quarter.
The banking sector led the march with cement, real estate and industrial sectors putting in a strong performance and offsetting petrochemicals' poor showing.
Elsewhere, the United States fared poorly with uninspiring job growth and a deadlocked political environment. Worse, even the stalwart BRIC -Brazil, Russia, India and China - saw growth sputter and their economic environments deteriorate.
Even the relatively insulated safe havens in the Middle East could not escape the doom. Initially, the regional markets made a valiant start to shrug of global economic weakness and did well till the first quarter, before losing their nerve by the second quarter and joining the global economic gloom.
IMF chief Christine Lagarde summed up the global economic mood: "This crisis does not recognize borders. This crisis is knocking at all our doors. For make no mistake: This is a global crisis," she told an audience in Tokyo.
The IMF's updated assessment of the world economy - to be released eight days from now - will highlight that the global growth outlook will be somewhat less that was being anticipated just three months ago. And even that lower projection will depend on the right policy actions being taken.
"A combination of the persistence of the euro area debt crisis alongside the lagged impact of last year's monetary tightening in emerging markets has caused global business confidence to turn lower," says Julian Callow, an analyst at Barclays Capital in a report.
"In turn, this constitutes downside risks to our global GDP projections for the second half. Already this week, our U.S. GDP projection has been trimmed for 2012 to 2.2%, compared with 2.4% previously, and to 2.1% from 2.5% for 2013), based mainly upon more cautious behaviour now expected of the U.S. business sector, resulting from financial market volatility and concerns about Europe."
In light of these grim developments, the stock markets that orbited around their domestic issues fared much better than those that were connected to the global economy.
"The start of 2012 saw a major comeback by the bulls," noted NBK Capital. "Markets across the globe began to rally, and financial woes seemed to be a thing of the past. However, toward the second quarter of 2012, global issues began to resurface, pushing several markets down.
DUBAI TOP PERFORMING GULF MARKETDubai was the second best performing market in the region in the first half, rising as much as 25% earlier in the year, but saw much the gains wiped out by the second quarter.
Some of its key sectors such as real estate, tourism and retail fared well, while Dubai Inc. companies made steady progress in working through their debt issues. But the market was side-swept by global fears and lost most of their gains.
Source: Zawya.com
Other Gulf markets fared poorly despite a great start. Like Dubai, the Saudi Tadwaul peaked at 23.57% by April, but steadily fell back to post a 4.9% growth by the end of the first half, Zawya data shows. The market lost much of its steam primarily due to global economic fears and oil prices falling from their triple-digit perch in the second quarter.
The banking sector led the march with cement, real estate and industrial sectors putting in a strong performance and offsetting petrochemicals' poor showing.
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