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GCC to be volatile this week – Analysis

GCC to be volatile this week – Analysis
The stock markets in the Gulf region are likely to be volatile this week

By: Mahmoud Gamal

Mubasher: The GCC stock markets are likely to resume the sideways-to-declining trend this week amid the escalated geopolitical scene in the region which negatively impacted the performance of global markets.

It is worth noting that Iran had shot down a US drone last Thursday, claiming it had violated the Iranian airspace.

The GCC bourses have seen a mixed performance at the end of last week as the UAE’s twin bourses ended the week in green territory, while the Saudi Stock Exchange (Tadawul) fell by nearly 1%.

المؤشر السعودي يواصل مكاسبه للجلسة الثانية.. و

Geopolitical tensions

The stock markets in the Gulf region are likely to be volatile this week due to the recent geopolitical tensions, vice president of Investment Research at KAMCO Raed Diab told Mubasher.

Moreover, the US-China trade war could weigh on the operations of some leading firms in the region, Diab said.

He noted that the US the Federal Reserve has kept interest rate unchanged, hinting at cutting them in case the economy slowed, which encouraged some traders, particularly in the real estate sector that recently faces major challenges.

The forthcoming announcement of listed-firms financial results for the first half of 2019 is one of the main factors that will shape the markets’ trend in the coming period, he added.

Image result for saudi financial market

Investment opportunities

Investing the banks’ stocks in the region, mainly in the UAE, is a good opportunity for traders, economist Ehab Rashad said.

Investors are anticipating the announcements of positive quarterly results by the end of the second quarters of 2019, Rashad indicated.

The UAE’s banks have gained momentum last week as Fitch Ratings had affirmed the long- and short-term issuer default ratings (IDR) for seven banks.

سوق دبي يربح 3 مليارات درهم في أسبوع.. وهذه الأسباب

Positive catalysts

Economist Jamal Agag said that there some positive catalysts that could boost the GCC markets, particularly the Abu Dhabi Financial Market (ADX) and the Dubai Financial Market (DFM), including anticipated mergers in the banks sector.

Agag said that the board members of Shuaa Capital will be meeting the board members of Abu Dhabi Financial Group (ADFG) to discuss the merger expected to form a financial entity with over $20 billion in assets.

The banks and real estate blue-chip stocks in the region have gained momentum last week on the back of foreign buying transactions, he added.

المؤشرات الكويتية تستهل التعاملات على ارتفاع جماعي


Tadawul is likely to perform positively this week due to the improvement of global oil prices, as well as optimism over the 2019 G20 Osaka summit to be held on 28 June to 29 June 2019, economist Mohamed Al-Maimouni told Mubasher.

Al-Maimouni projected investment funds to pump further investments into the stock market after the completion of the third tranche of Tadawul’s inclusion to FTSE Russell Emerging Market index.

Accordingly, the banks, petrochemical, and telecommunication stocks are likely to see a positive performance, he expected.

Boursa Kuwait

For his part, economist Ibrahim Al-Failakawi said that Boursa Kuwait would perform differently than the other GCC stocks this week in line with the market’s potential upgrade on the MSCI EM index to be announced on 25 June.


Translated by: Mai Ezz El-Din