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Geopolitical tensions to set GCC markets’ trend in September

Geopolitical tensions to set GCC markets’ trend in September
Investment funds will be cautious while trading this month

By: Mahmoud Gamal

Mubasher: The performance of the GCC stock markets is likely to vary in September amid the positive indicators of the US-China trade war being recently resolved with a calm attitude, analysts told Mubasher.Info.

By the end of August, the bourses in the Gulf region have seen a mixed performance, with the Saudi Stock Exchange (Tadawul) leading the decliners after hitting its lowest level in eight months and the Abu Dhabi Securities Exchange (ADX) rising marginally.

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Limited increases

The GCC markets are expected to begin September with limited upticks amid investors’ anticipation of new updates regarding the US-china trade dispute, economist Ibrahim Al-Failakawi told Mubasher.

On Sunday, the Trump Administration has begun imposing additional tariffs on Chinese goods in the latest escalation of the trade war between the two countries.

Al-Failakawi also highlighted the great performance of the gold as a safe haven for investors until the geopolitical tensions, including the war in Yemen, calm down.


Negative performance

The GCC bourses are projected to witness a negative performance, affected by the US-China trade war and UK’s withdrawal from the European Union (EU) likely to take place on 31 October, CEO of IV Markets Egypt said.

Investment funds will be cautious while trading this month, waiting for new catalysts to emerge and boost markets’ liquidity, he added.

He also indicated that the launch of Expo 2020 Dubai will bolster the real estate sector in the region over the coming months, mainly the UAE twin bourses.

However, some predictions show that a number of funds will direct their investments to stock markets in the UAE and Kuwait where stocks have reached attractive levels, he emphasised.

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As for the Saudi Stock Exchange (Tadawul), economist Abdullah Baeshen said that the market have seen a bearish trend in August due to the quarterly financial results of listed-companies that were reflected on the fair value of stocks.

Tadawul has experience major turbulences due to the mixed performance witnessed by the global stock markets, as well as the US-China trade war, and the escalating geopolitical tensions including Iranian attacks on oil tankers in the GCC regions, Baeshen highlighted.

He also remarked that the recent upgrade of Tadawul in the MSCI emerging markets index have attracted SAR 28 billion in foreign liquidity to the market.

Furthermore, Baeshen expected that the Saudi market will thrive economically over the coming period.


Translated by: Mai Ezz El-Din