GCC markets likely to revive in Q4 - Analysis

GCC markets likely to revive in Q4 - Analysis
The GCC bourses performed positively during Q3-18

By: Mahmoud Gamal

Mubasher: The GCC stock markets are likely to extend gains in the fourth quarter of this year as the economies of the region are expected to witness further growth.

Most of the Gulf markets closed Q3-18 in green, topped by Boursa Kuwait, while both the Saudi Stock Exchange (Tadawul) and Muscat Securities Market fell.

The GCC bourses performed positively during the July-September period of this year, but their performance was below expectations as compared with the past periods, vice president of Investment Research at KAMCO Raed Diab said.

Most of the sectors declined in the three-month period ended September, except for the banks and the commodities sectors, he indicated.

The GCC stocks are expected to see a bullish trend in Q4-18 on the back of the positive economies and improved oil prices, Diab added.

He also noted that overseas institutional investments in the region’s blue chips, in line with selective buying, made stocks hit record highs, including the real estate stocks, pointing out that the banks are likely to achieve solid profits for the coming period.  

The inclusion of Boursa Kuwait to the FTSE EM index and Tadawul to MSCI’s EM index has positively impacted the investors’ trading, mainly on blue-chip stocks, Diab noted.

On 20 September, Boursa Kuwait announced its listing on the FTSE Russell index for emerging markets.

In June, the global index compiler MSCI revealed the inclusion of Tadawul to its emerging market (EM) index.

The GCC-listed banks are still flexible on the back of the robust general budget, the economic revive in the region, and the hike in interest rates, he pointed out.

Earlier this week, the Saudi Ministry of Finance expected government spending to rise to SAR 1.06 trillion in 2019, versus SAR 1.03 billion this year.

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.

It is worth noting that four GCC central banks raised interest rates following the US Federal Reserve's interest-rate hike last Wednesday.


Translated by: Mai Ezz El-Din