Examining Risk in GCC Markets - February 2009

In this Research Bulletin, we review the recent risk environment in Gulf Cooperation Council (GCC) countries using the new and enhanced Barra Global Equity Model (GEM2). The main finding of this paper is that despite the segmented nature of the GCC markets, correlations of GCC countries' stocks with Developed and Emerging Markets have increased. Despite higher correlations and the large exposure of GCC markets to the Financial sector, risk forecasts for GCC markets have grown considerably less over the past year than for either Developed or Emerging Markets.