GCC Stocks: Bracing For Further Losses

Today's (May 25) large sell-off across all GCC bourses highlights the high degree of correlation between movements in global equity markets with those in the Middle East. The correlation is not exact, which means that GCC equities will continue to offer some diversification benefits to global investors. That said, the general trend in GCC markets will continue to be dictated by the global situation. Given that there are no quick fixes for the debt troubles in Europe, and indeed, the crisis there could yet widen if contagion spreads from Greece to other fiscally-weak eurozone states, global risk aversion is likely

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