By: Mahmoud Gamal

Mubasher: Analysts have set some factors that would shape the trend of the GCC stock markets this month, including the performance of global markets, 2018 cash dividend distributions, the recent development on the US-China trade war, and the UK’s withdrawal from the European Union (EU).

The GCC bourses are still luring several investors, as stocks hit attractive levels amid the stable economy of the region, they stressed.

 

Global factors

Investors in the GCC stock markets are expected to be cautious this week and anticipating for the global markets’ performance after incurring losses, head of asset management at MENACORP Tariq Qaqish told Mubasher.

Global markets are likely to overcome the negative trend and resume the upward trend, as no evidence was found against the US president Donald Trump's election campaign members regarding their conspiracy with Russia during the election period, Qaqish added.

Moreover, investors in the Gulf bourses are mainly anticipating the recent developments on the final agreement between the US and China to end their trade war, he indicated.

Several traders around the world have changed their position in stock markets over the past period due to trade wars and the Brexit, he said.

Stock markets in the region have been impacted by these events, especially in 2018 through the absence of foreign investments, MENACORP’s head of asset management said.

Qaqish highlighted that the US Federal Reserve System does not intend to raise interest rates this year, therefore, this will attract some investment portfolios to real estate stocks.

This has pushed investors to pump liquidity into the region’s markets, particularly the UAE’s twin bourses that hit record highs recently, he added.

Regulators seek to accelerate the process of initial public offerings (IPOs) of state-run firms such as the free-zone companies, mainly in the UAE, which will boost the markets in the coming period, Qaqish noted.

IPOs

The GCC markets still need to kick off new IPOs to attract further liquidity, the CEO of Al Safwa Mubasher Ehab Rashad told Mubasher.

Many sectors, including medical care and education, are still not represented in the markets, Rashad highlighted.

Rashad expected the IPOs market in the GCC to improve, especially in the UAE, in the second half of 2019.

He said that some firms seek dual-listing on the London Stock Exchange (LSE) and the Dubai Financial Market (DFM), such as Emirates NBD.

New liquidity

For his part, Issam Kassabieh, a senior financial analyst at Menacorp Financial Services, said that the UAE stock markets still have the chance to see further gains as their price/earnings ratio hit low levels.

Investors in the region are anticipating new liquidity to be flowed into the markets in line with the consecutive general assemblies being held to approve annual dividend payments, Kassabieh noted.

FTSE

The performance of the GCC markets have recovered recently as the Saudi Stock Exchange (Tadawul) joined the FTSE Russell EM index, vice president of investment research at KAMCO Raed Diab said.

The increase in global oil prices have also pushed up the markets, Diab indicated.

The US and China may reach a final agreement to end the trade war which would positively impact investors’ optimism in the Gulf bourses, he added.

However, he said that the Gulf bourses are likely to be volatile over the coming trading sessions.

 

Translated by: Mai Ezz El-Din