8 Factors weigh on GCC stock markets

8 Factors weigh on GCC stock markets

By: Mahmoud Gamal

Mubasher: Eight main factors are pushing down GCC equity markets, analysts told Mubasher, expecting that the negative performance will carry over into over the coming four sessions, which mark the end of 2018.

GCC stock markets are facing upward pressures as investors tend to get rid of their current shares for many reasons, chief among them the negative performance of global equity markets, technical analyst Ibrahim Al-Failakawi told Mubasher.

Al-Failakawi highlighted that the US government’s partial shutdown due to an impasse over President Donald Trump’s demand for more money for funding a wall along the US-Mexican border.

The result of the US-China trade war truce is not clear, which in return adversely affects foreign investments in gulf markets.

He noted that lower oil prices, which hit the lowest level since the third quarter of 2017, have sent GCC bourses down over the previous sessions.

In 2019, the equity markets will witness further cautious trades in Europe and the US, as analysts project a severe banking crisis to take place, particularly in Germany, the technical analyst said.

The second phase of upgrading Boursa Kuwait to the FTSE Emerging Markets Index, which took place last week, shall restore neighboring stock markets.

TASI

The benchmark Tadawul All-Share Index (TASI) of the Saudi Stock Exchange (Tadawul) was negatively affected by external factors, including the Federal Reserve’s decision of raising interest rates and the correction movement of oil prices, economist Mohamed Al-Maimouni said.

Accordingly, TASI has not hovered over the level of 7,950 points and started a declining trajectory.

Al-Maimouni added that the Saudi market is expected to extend its decline pace over the coming sessions.

 

Translated by: Kholoud Mohamed Hussein