Gov’t spending, oil prices to boost GCC stocks this week

Gov’t spending, oil prices to boost GCC stocks this week
Most of the GCC markets closed Sunday’s trading session in green

By: Mahmoud Gamal

Mubasher: Government spending and higher oil prices are likely to boost the GCC stock markets this week, analysts told Mubasher.

Most of the GCC markets closed Sunday’s trading session in green, topped by the Saudi Stock Exchange (Tadwaul) that rose to 7,999.5 points, its highest level since 29 August, on the back of the petrochemical and banks stocks.

The Saudi Ministry of Finance expected government spending to rise to SAR 1.06 trillion in 2019, versus SAR 1.03 billion this year, according to official statistics.

On Sunday, the UAE Cabinet approved an estimated budget of AED 180 billion for the next three years; nearly 59% of this budget will be dedicated for developing education and community.

Robust economy

The Saudi market has witnessed a bullish trend following the announcement of budget expectations and high revenues, which will consequently reinforce the oil-rich country’s economy, financial advisor Mohammed Al-Shammari told Mubasher.

The Saudi government spending hit record highs, bolstering vital economic sectors, including the banks, construction, which will positively impact Tadawul, Al-Shammari added.

The kingdom aims not to exceed the debt ceiling above 30% of the country’s gross domestic product (GDP), as well as raise non-oil revenues as part of the main basics that support the Saudi stock market, he said.

The hike in oil prices is one of the main factors that boost the GCC stocks, mainly the Saudi bourse, he indicated.

Investors in the GCC markets are anticipating the financial results for the third quarter of this year, he pointed out.

He highlighted that benchmark Tadawul All-Share Index (TASI) is moving upwardly, pointing out that the index may test 8,205 and 8,167 points as it is currently targeting 8,045 points.

Despite seeing a strong resistance, TASI may resume the bearish trend and fall to 7,300 and 7,030 points, Al-Shammari stressed.

A bull run

As for Boursa Kuwait, Mohammed Radwan, a member of the International Federation of Technical Analysts, said that it will revive tentatively and hover near 6,000 and 6,100 points.

The Kuwaiti market rose last week on the back of FTSE Russell’s decision that pumped heavy liquidity in the market.

Stable QSE

The Qatar Stock Exchange (QSE) has recently succeeded in settling above 9,765 points, technical analyst Ibrahim Al-Failakawi said.

The Qatari bourse's general index may maintain the positive performance and touch 10,000 points if it surpasses 9,765 and 9,788 points this week, he indicated.

He stressed that QSE is moving upwardly in the meantime, but it will target 9,400 and 9,380 points in case it breaks main support.


Translated by: Mai Ezz El-Din