By: Mahmoud Gamal
Mubasher: The GCC stock markets are likely to be gripped by ten factors during the second quarter of 2019, analysts told Mubasher.
The Gulf bourses are expected to see further gains on the back of the Saudi Stock Exchange’s (Tadawul) inclusion in the FTSE Russell EM index, the new mergers and acquisitions in the region, and the onset of announcing Q1-19 financial results of the firms.
By the end of Q1-19, Tadawul topped the GCC markets, jumping 12%, followed by Bahrain Bourse and the UAE’s twin bourses.
Major IPO
Investors in the GCC markets are anticipating the major initial public offering (IPO) of state-run Saudi Aramco after acquiring a majority stake of 70% in Saudi Basic Industries Corp (SABIC), the CEO of Al Safwa Mubasher Ehab Rashad told Mubasher.
Bourses in the region have seen an unexpected performance in Q1-19 on the back of listed-firms’ positive annual financial results and cash dividends, Rashad highlighted.
The stock markets have also faced internal obstacles that negatively impacted their performance, including the restructuring of well-known companies and the announcement of some companies’ accumulated losses, he added.
He stressed that the Gulf markets could attract further global investments as stocks hit record highs for purchasing.
The UAE-listed blue-chip stocks such as Emaar Properties and Dubai Islamic Bank have seen speculations recently that pushed them up, which will attract foreign and institutional investments, he said.
Trade war
For his part, CEO of Mindcraft Consulting Fady Al-Ghattis said that the performance of the global stock markets has impacted GCC bourses over the past period amid the recent development of the US-China trade war.
Al-Ghattis noted that the Gulf bourses, mainly Tadawul and the UAE’s twin bourses, will be impacted by the global markets amid the recent development on the US-China trade dispute, in addition to the UK’s withdrawal from the European Union (EU).
The GCC markets are likely to see momentum backed by foreign liquidity flowed into blue-chip stocks, he projected.
He said that GCC listed-firms are expected to post robust Q1-19 financial results that would lure liquidity and institutional investments.
Moreover, the expected global economic slowdown, in addition to the anticipated meeting of the Organization of the Petroleum Exporting Countries (OPEC), will be the main catalysts for some listed-companies on the region’s bourses, Al-Ghattis indicated.
Economic reforms
In the same vein, financial adviser Aaron Leslie told Mubasher that OPEC aims at cutting output which will boost oil and gas stocks in the Gulf region by 7% to 8% in Q2-19.
He also projected the economic reforms announced by some governments in the region such as the UAE to encourage foreign investors to invest in the markets amid the global economic slowdown and the US-China trade war.
Leslie noted that these initiatives would boost investors’ confidence in trade business and would help raise the gross domestic product (GDP) in the GCC countries, mainly the UAE.
Translated by: Mai Ezz El-Din
