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GCC stocks to carry on volatile trend on US-China trade war

GCC stocks to carry on volatile trend on US-China trade war
The Gulf bourses closed Thursday’s trading sessions in red territory

By: Mahmoud Gamal

Mubasher: The GCC stock markets are likely to maintain the volatile trend this week due to 10 key factors, capped by the US-China trade war, analysts told Mubasher.

The Gulf bourses closed Thursday’s trading sessions in red territory, led by the Abu Dhabi Securities Exchange (ADX).

On Friday, the US announced it had raised tariffs on goods imported from China to 25% from 10%, reaching up to $200 billion.

6 مزايا بين سوقي أبوظبي و

Cautious investors

Global stocks have seen pressures last week, which will make investors in the GCC markets more cautious this week, the head of asset management at MENACORP told Mubahser.

Recent reports have shown that the global stock markets have lost billions of dollars, which confirms the cautious attitude of investors, Tariq Qaqish highlighted.

Qaqish said that US President Donald Trump has indicated last Friday that the Sino-US tensions might get better, which would make global markets and the GCC bourses resume a temporary upward trend that is unlikely to continue amid the holy month of Ramadan.

محللون يكشفون العوامل المؤثرة على أسواق الخليج


Issam Kassabieh, senior financial analyst at Menacorp Financial Services, said that the GCC markets are currently pressured by the below-expectation financial results of the listed firms.

At the global level, Kassabieh indicated that the current weak performance of the GCC stocks is mainly driven by the US-China trade war, as well as the decline in oil prices, which pushed investors to sell-off, exit from stocks, and wait temporarily to monitor news regarding this matter.

The blue-chip stocks have seen selling pressures last week, he noted, pointing out that some shareholders are anticipating many internal factors such as the conditions of some firms including Drake and Scull International (DSI) that recently faced a financial crisis.


Q1-19 results

For his part, economist and technical analyst Ibrahim Al-Failakawi said that the Sino-US trade tensions come in line with the end of announcements season of GCC listed-firms financial results for the first quarter of 2019.

 This has negatively impacted the moves of foreign portfolios that tended to sell in traded stocks to cover their exposed financial positions in the global stock markets, Al-Failakawi added.

He further noted that investors in the Gulf bourses have lost their appetite of buying by the beginning of Ramadan, indicating that trading has been calm during the month.

ما هو القطاع الأفضل للاستثمار ببورصات الخليج في 2019؟


As for the Saudi Stock Exchange (Tadawul), economist Mohamed Al-Maimouni told Mubasher that the market has been seeing consecutive declines due to corrections.

Al-Maimouni said that traders are anticipating Tadawul to join the MSCI Emerging Markets Index by the end of May, which will add billions to the market’s liquidity.

He also noted that lower oil prices and geopolitical tensions including the US-China trade war have weighed on the Saudi market.


Translated by: Mai Ezz El-Din