By: Mahmoud Gamal

Mubasher: It is expected that the meeting held between members of the Organization of Petroleum Exporting Countries (OPEC) and the potential truce between the US and China will have an impact on GCC stock markets on Thursday and next week, analysts told Mubasher.

OPEC members are set to convene on Thursday and Friday, in Vienna, and decide on how to maintain stability in the oil market. However, OPEC is under pressure from the US to not reduce production.

By the end of Wednesday, most GCC bourses ended in the red, led by the Dubai Financial Market (DFM), which plunged to three-year lows on the back of real estate stocks and investor sentiment.

Decisions

GCC market analyst Ibrahim Al Filkawy forecast that the OPEC meeting and ongoing US pressure would impact Gulf bourses, noting that a reduction in output or cut that does not meet present supply levels may push oil prices towards $50 per barrel again, which in turn would negatively impact GCC governments’ spending.

Investors are also awaiting the US Federal Reserve’s decision on raising interest rates due later this month, which will increase the cost of investment in stocks. GCC governments often follow the Federal Reserve with a rate hike of their own.

As for the Kuwaiti market, Al Filkway forecast that it would extend its record gains as it heads for the second stage of its upgrade on the FTSE Russell index on 20 December.

The analyst expects around $500 million to enter the Kuwaiti bourse after a similar value was invested in the market in September following the first stage.

In June, Boursa Kuwait announced adopting the FTSE Russell Industry Classification Benchmark (ICB) for all equity stocks listed on its indices.