Financial markets in most countries touched by last year's Arab Spring disappointed in the first quarter by staying broadly flat or ending down, as investors held off amid signs of continued volatility, and private-sector involvement in the economies remained weak.
Bahrain's All Share Index nudged into the green to end the quarter up 0.8 per cent. In Morocco, the main MASI index is down 0.7 per cent. The Amman Stock Exchange is 0.4 per cent up for the year to date.
"The low points [of the first quarter] are the markets that have stagnated, including Morocco, Tunisia, Jordan and Bahrain," says Graham Stock, the chief strategist at Insparo Asset Management, which focuses on frontier markets.
Outside the stellar performance seen in Egypt, which is up 37.6 per cent this year, the only other indexes to show decisive positive movement in post-Arab Spring countries are in Kuwait, up 3.5 per cent, and in Lebanon, where the main Blom Index has gained 3.4 per cent.
"We remain more cautious of North African markets as we believe their weaker domestic finances and closer links to Europe render them vulnerable if the present optimistic mood among global investors reverses," says Bassel Khatoun, a portfolio manager with Franklin Templeton Investments Middle East.
Egypt's rally has relied on a few key stocks, Mr Stock says. "The rally has been relatively narrow, with Orascom Telecom and Mobinil up around 130 per cent year to date on name-specific developments, and only three other stocks beating the index at all."
Libya reopened its stock exchange last month after it closed for a year during the country's civil. The move is raising hopes that private companies will start to replace the stranglehold of government entities on the country's index, and drive job creation and growth.
Steen Jacobsen, the chief economist at Saxo Bank,says the recovery of financial markets in Arab Spring countries lies in their ability to restart their private sectors. "There needs to be a smooth handover from public to private capital investment," he says. "Too many Mena markets are almost entirely dependent on state business and interaction to create growth. This needs to be reduced."
In Tunisia, where the unrest that would eventually spread across the Arab world began at the end of 2010, the Tunindex ended the quarter up 1.7 per cent. Egypt and Tunisia are net importers of oil, and with the price of Brent crude up to about $126 a barrel, analysts say energy costs are a key risk to the countries' stability.
"The first quarter has been more challenging for the oil-importing countries of North Africa and the Levant," Mr Khatoun says. "However, after a difficult 2011, many are now beginning to show signs of economic recovery and progress towards political stability."
One of the biggest risers on the Tunindex so far this year is Société Magasin Général. On the Tunisian stock exchange, shares in the food and furniture distributor jumped from 136 Tunisian dinars to 177.96 dinars in the first three months of the year. The company has recently signed a partnership agreement with the French group Auchan to start work on rapid movement into Libya.
Arab Monitor calls the Tunisian market "one to watch" over the next 12 months as Libyan liquidity flows increase. "We see regional cooperation as the priority emphasis and potential for the Maghreb," its researchers said in a note.