Regional stock markets put in a mixed performance in July, as investors closely monitored listed companies’ second quarter earnings announcements.

UAE stock markets recorded the best performance against their regional peers, while Egypt’s stock market was the worst performer. The aggregate stock market index of the six Gulf Cooperation Council (GCC) countries along with Egypt rose 10.25 percent in July.

Data from Refinitiv’s Eikon shows that oil prices and global markets remained mainly unchanged during the month. Crude oil prices edged 0.17 percent higher while the MSCI World Index edged 0.21 percent lower.


Source: Refinitiv’s Eikon.


Dubai’s index added the most gains in July, gaining 9.77 percent, while Abu Dhabi’s index was the second best performer, surging 6.79 percent.

“Both markets have been boosted by the better than expected earnings and improvements in the geopolitical landscape,” Iyad Abu Hweij, managing director at Allied Investment Partners, told Zawya by email.

In Dubai, the real estate sector was the main boost to the index. Emaar Properties’ stock gained 23.71 percent, while Arabtec Holding’s shares added 16.45 percent and Emaar Malls’ stock gained 4.95 percent.

Commercial Bank of Dubai’s Q2 2019 net profit rose 29 percent year-on-year, triggering a rally in the bank’s shares in July, adding 5.61 percent.

In Abu Dhabi, market heavyweight First Abu Dhabi Bank reported a 5 percent rise in Q2 2019 net profit, leading the bank’s shares to add 7.59 percent during the 31-day period.

Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank’s shares rose 7.53 percent and 8.24 percent respectively.

“For the coming month we expect performance in the UAE markets to slow down and to be horizontal. Investors will be looking to take in some of the profits made in July, as momentum from the positive earnings cools off,” Abu Hweij added.


Source: Refinitiv’s Eikon.

Saudi Arabia

The Saudi index fell 1.01 percent in July, a month after Tadawul (TASI) outperformed all regional peers.

“The performance in the TASI reflects the negative performance in some of the large cap entities on the index,” Allied Investment Partners’ Abu Hweij told Zawya.

A Thomson Reuters index of Saudi banks dropped 1.68 percent according to data from Refinitiv’s Eikon.

Samba Financial Group’s shares fell 8.27 percent, while Riyad Bank’s shares dropped 3.53 percent and Bank Saudi Fransi’s stock retreated 2.65 percent.

Saudi Basic Industries Corporation (SABIC), the world's fourth-biggest petrochemicals company, reported a 68.32 percent drop in Q2 2019 earnings. The company’s shares fell 6.28 percent in July.

“The TASI index will be looking to rebound modestly, with trading volumes expected to be subdued,” Abu Hweij added.


The Qatari index edged 0.47 percent higher, rising for the second month in a row after it added 1.78 percent in June.

A research note by the Kuwait Asset Management Company (Kamco Research) said that the telecom index was the best performing index on the market, gaining by 5.8 percent, while the transportation index followed, adding 2.1 percent.

Telecom company Ooredoo drove the surge in the telecom index, with the company’s shares rallying 9.29 percent.

Eikon data shows that an index of banks and financial services companies also rose 0.89 percent. Qatar National Bank (QNB), the Middle East's largest lender by assets, saw a 1.56 percent increase in its shares.

“Trading activity on the index was mixed month-on-month (m-o-m), as value traded during July-19 decreased by 30.8 percent to reach QAR 3.8 billion, while traded volumes improved by 90.8 percent m-o-m to reach 1,282 million shares,” Kamco said.

“The Banks & Financial Services sector was the most active in terms of value traded during July-19, accounting for 41.9 percent of the total value traded, followed by Industrials and Consumer Goods & Services sectors, as they accounted for 20.1 percent and 12.7 percent of the total value traded respectively,” Kamco noted.


Kuwait’s premier market index added 5.76 percent during the 31-day period.

“Kuwait’s large cap premier market index remained strong, as positive sentiment derived from anticipated passive flows from the MSCI upgrade and earnings growth continued,” Kamco’s note said.

On June 25, MSCI announced that it would upgrade Kuwaiti equities to emerging market status in its May 2020 semi-annual review. (Read more here)

“On the sectoral front, the monthly performance was topped by Telecoms with a gain of 8.4 percent. Banking and Industrials indices followed with gains of 5.2 percent and 4.8 percent respectively,” Kamco added.

According to the International Monetary Fund’s (IMF) January report, Kuwait’s non-oil growth is projected to increase to 3 percent in 2019 and 3.5 percent in 2020, assuming that oil prices average $61.50 per barrel in 2019-2020 and $60.60 over the medium term.

At the end of July, oil prices were trading at $65.17 per barrel. 


Egypt’s blue-chip index EGX30 was the worst performer in the region, dropping 5.26 percent for the period.

The highest weighted stock on EGX30, Commercial International Bank (CIB), saw its shares drop 1.44 percent.

“The index (EGX30) seems to have hit a point of support at the 13,380 levels,” Abu Hweij said. The index closed at the 13,655 level on Tuesday.

“We have seen the index rebound from these levels before in May. Should this level be breached in the upcoming weeks, the EGX30 could be pushed down further,” he added.

In the latest Emirates NBD quarterly report on Egypt, the bank forecast a modest acceleration in the country’s real GDP growth rate this fiscal year, projecting an expansion of 5.8 percent, a bit lower than the government’s 6.0 percent target.


The Muscat securities market index was the worst loser among its GCC peers, dropping 3.2 percent.

“All sectors closed in the red for the month, and the Industrials index was the main decliner with a fall of 4.5 percent m-o-m, followed by the Services index at -4.0 percent m-o-m, while the Financials Index registered a decline of 2.8 percent m-o-m,” Kamco’s note said.

The index has lost 13.02 percent in the first seven months of the year. On April 19, ratings agency S&P Global cut its outlook on Oman to negative from stable, while affirming its debt score at BB.

Ratings agency Moody's downgraded Oman's sovereign rating to junk status in March this year. (Read more here).

“Trading activity witnessed a decline during July-19 despite lesser number of trading days owing to Eid holidays in the prior month,” the Kamco noted added.


Bahrain’s stock market was one of the best performers in the region, adding 5.21 percent.

“Sectoral performance was driven by commercial banks, as the sector was up 8.1 percent m-o-m and 31.9 percent year-to-date,” Kamco’s note said.

Ahli United Bank’s shares gained 9.51 percent during the month while Bank of Bahrain and Kuwait’s stock rose 14.29 percent, data from Refinitiv’s Eikon showed.

S&P Global ratings said in its latest report on Bahrain that it expects economic growth to average 2.4 percent over 2019-2022 and fiscal deficit to be reduced to 4.6 percent in 2022. (Read more here

“Trading activity declined, as volumes decreased by 13.9 percent m-o-m to reach 105.9 million shares. Value traded receded by 23.5 percent m-o-m and reached BHD 27.8 million,” the report added.

(Reporting by Gerard Aoun; Editing by Brinda Darasha)


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