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Where are GCC bourses headed end-2018? Analysts weigh in

Where are GCC bourses headed end-2018? Analysts weigh in
The Saudi Stock Exchange (Tadawul)

By: Mahmoud Gamal

Mubasher: Gulf bourses are expected to continue their jittery-to-rising performance in the remaining two sessions of 2018 as various portfolios seek to improve their end-of-year closings and increase positions in operational stocks with dividend returns, analysts told Mubasher, noting that this comes despite the sharp drop seen on global bourses on Friday.

By the end of Thursday’s trading session, the Saudi Stock Exchange (Tadawul), along with several neighbouring bourses, ended higher on the back of a rise in oil prices, which helped investor sentiment.

Economic analyst Khalid Al-Zahery forecast that the Sunday’s and Monday’s trading sessions will see gains on the back of buying by portfolios.

As the fourth quarter and full-year near their close, companies’ budgets will see major fluctuations are investors eye those with strong dividend returns, Al-Zahery told Mubasher, indicating that GCC bourses were directly impacted by oil prices.

Meanwhile, economic analyst and consultant Ibrahim Al-Filkawy told Mubasher that oil price movements and the recent deal between members and non-members of the Organization of Petroleum Exporting Countries (OPEC), which has not yet come into force and therefore has not had an effect on oil prices, has results in prices being at their lowest level since 2017.

Portfolios are likely to see temporary gains in the their GCC investments, the analyst noted, indicating that the major uncertainty that has continued to cloud the tit-for-tat between US President Donald Trump and Mexico over the so-called wall, coupled with the Federal Reserve’s continued hiking of interest rates, which in turn harms both global and Gulf stocks.

In 2018, the Fed raised interest rates four times, the last of which was in December, while forecasts indicate that Fed is likely to increase rates twice in 2019.


Translated by: Nada Adel Sobhi