KUWAIT CITY: Kuwait Financial Centre ‘Markaz’ recently released its Monthly Market Research report. In this report, Markaz examines and analyzes the performance of equity markets in the MENA region as well as the global equity markets for the month of August.
GCC bourses took a hit in the month of August after a relatively flat July with most of the indices ending in the red. Saudi’s TASI, the largest bourse in the region shed 3.5 percent followed by Abu Dhabi general index and Kuwait weighted index that lost 2.3 percent and 1 percent last month. With decline in major indices across the region, the S & P GCC index ended 1.2 percent lower at 90 points. Despite Brent crude gaining 10.7 percent last month, Saudi shares bore the brunt of the negative investor sentiment due to the indecisive situation prevailing among the OPEC and non-OPEC members to freeze the oil production. Markets in Oman (-1.9 percent), Bahrain (-1.2 percent), Jordan (-1.4 percent) and Morocco (-0.2 percent) declined in value. Qatar index jumped 3.6 percent in August with the inclusion of Qatari stocks in the FTSE Emerging markets index. FTSE relaxed its liquidity rules for the Qatari blue chips to be included in the index after which blue chips in Qatar surged last month. Ooreedo topped among the blue chips in the region registering MTD and YTD of 8.8 percent and 36.9 percent respectively. Among other indices that gained in August were Dubai (0.6 percent) and Egypt (1 percent), though the increase was modest compared to the previous month.
Blue Chips were mixed in August with DP World and Ooredoo gaining 8.8 percent and 8.1 percent respectively. Four of the top five gainers were from Qatar, with Qatar National Bank and Industries Qatar share prices up by 7.5 percent and 6.1 percent respectively. Investors flooded their investments into Qatari large caps after the announcement of FTSE to include them into the emerging markets index on 24th August 2016. Saudi stocks were at the bottom, National commercial bank (NCB) and Saudi Telecom (STC) plummeted by 8 percent and 6.5 percent in August. Saudi Telecom Corporation’s profit for H1 2016 declined by 16percent YoY adding to the adverse sentiments attached to the Saudi stocks. Plans of Saudi Telecom to start its fourth generation mobile phone services in Egypt that was expected to give a boost to its revenue failed to materialize last month. With declining oil income, banks in Saudi Arabia are facing tightened liquidit position. Government deposits are expected to decline and banks have started to raise capital through bond issuances to manage their finances. All these factors reflect in the 8 percent decline in stock prices of the largest lender in the kingdom, NCB.
