The GCC stock markets could see diverging developments this week as markets are likely to react differently to the strength of the oil market and the materializing global economic slowdown. Some price corrections were observed last week and could continue in some markets while others could revert to the upside. In any case, strong local fundamentals and improving sanitary conditions should provide some support.

Investors will remain on guard regarding China’s Evergrande’s ability to cover its liabilities in the future as the company already missed a payment deadline last week. The Chinese government is expected to step up oversight as fear of negative impact on the rest of the economy remains a concern.

Federal Reserve’s Decision

While last week’s Federal Reserve’s decision to keep interest rates on hold and to keep asset purchasing tapering at bay has helped market sentiment, the bank has also lowered its economic growth forecasts. The same conclusion was exposed by other western central banks which suggests further economic slowdowns in the coming months that could impact markets elsewhere including the GCC.

Oil Prices

Oil prices could keep increasing this week as the market remains tight and could tighten even more so. The production increases promised by OPEC+ have not yet arrived at their fullest as some member countries struggle to increase their output while US production hasn't recovered to its pre-hurricane levels. At the same time, demand is expected to grow as utilities continue switching to oil as an energy source as the winter season slowly approaches.

Dubai Stock Market

The Dubai stock market could see additional price corrections this week as it snapped out of an 18 month-long uptrend. The market will remain weighed down by global economic slowdown worries and to a certain extent by the uncertainty around production levels in the oil market. However, the price corrections should not be too steep as strong local fundamentals and the positive sanitary developments work as a cushion for the market.

AAN Digital

AAN Digital has seen price improvements since the start of the pandemic as telecommunications have taken a central stage in professional and personal settings. The company should see additional revenue increases as full and partial remote work becomes the norm in many companies. The stock price could return to positive territory this week after last week’s correction.

Dubai Investment’s Stock

Dubai Investment’s stock could see increases in price in the coming weeks after its latest corrections. The company would achieve better figures thanks to the improving sanitary situation and as additional countries reduce restrictions helping Dubai play its role as a hub and boost the activity overall. The stock could also see additional interest from international investors who are looking for more exposure in the region as futures contracts on the company’s stock are now available for trading.

Saudi Stock Market

The Saudi stock market could return to demonstrate a positive trend as the market prices in last week’s Federal Reserve decision and the strong increase for oil prices. The market could see continued support from crude prices as demand keeps improving while production levels lag. This impetus should add to the strong local fundamentals which have stopped the market from correcting too much throughout September.

Tihama Advertising Company

Tihama Advertising Company could see increases in its stock price as strong oil prices and the government’s initiatives to diversify the economy away from oil should boost consumption locally and spur increased communication budgets. As a result, the company should see improving figures and narrower losses in the next quarters.

Egyptian Stock Market

The Egyptian stock market could see additional gains this week as investors’ risk appetite remains strong following the direction taken by western central banks. The trend could also get more traction if major stock markets slow down further as international investors will start looking for opportunities in riskier markets.

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