Kuwait : Kuwait Financial Centre “Markaz” recently released its Monthly Market Review report for the month of December 2021. Markaz report noted that Kuwait’s equity market had registered gains, supported by easing of concerns over the severity of Omicron variant and rise in oil prices. Kuwait All Share index has gained 3.7% for the month, extending its yearly gains to 27.0%.

Among sectors, Boursa Kuwait’s Consumer Discretionary sector was the top gainer, rising 9.9% for the month, followed by Financial Services at 5.5%. Technology sector index declined the most, falling 7.8% for the month. Boursa Kuwait’s banking sector index was up by 4.2% in December. Among Premier Market stocks, Burgan Bank and Gulf Bank were the top gainers during the month, rising 16.2% and 14.3% respectively.

Regionally, S&P GCC composite index rose by 4.0% for the month, logging a 31.4% gain for 2021. Reports on lower severity of Omicron variant supported the markets despite countries imposing restrictions amid continued spread of the COVID-19 variant. Saudi Arabia was the top gainer for the month, increasing by 4.8%, followed by Dubai, which gained 4.0%. Saudi Arabia expects to post a surplus of SAR 90bn (USD 23.99bn) in its budget for 2022, its first surplus since 2014. While the country expects higher revenue for 2022 at SAR 1.05tn (USD 278bn), its budgeted expenditure is down by 6% y/y. Abu Dhabi declined the most at 0.7%. Bahrain, Kuwait, Oman and Qatar gained 3.9%, 3.7%, 3.2% and 2.1% respectively.  Among the GCC blue chip companies, the best performer was Al Rajhi Bank, which gained 7.3% during the month, followed by SABIC, which gained 7.2%. SABIC’s board has recommended cash dividend at SAR 2.25 per share for H2 2021.

UAE would be shifting to a four-and-a-half day’s working week with Saturday-Sunday weekend from 2022 to better align its economy with global markets. Abu Dhabi and Dubai stock markets would also be functioning from Monday to Friday from January 3, 2022. UAE’s central bank would be extending many of the measures under its TESS program including prudential relief measures relating to capital buffers and liquidity for banks until June 30, 2022 to support the country's continued economic recovery. World Bank has forecasted GCC region’s 2021 GDP growth at 2.6%, expects the trend to continue in 2022 owing to OPEC+ adhering to its production increases, and improved business sentiment on higher oil prices. Fitch Ratings has revised Oman’s credit rating to stable from negative, citing improvements in key fiscal metrics.

Global equity markets ended the month in positive territory. The MSCI World and S&P 500 (U.S.) indices gained 4.2% and 4.4% respectively for the month. U.S Fed is set to quicken the pace of withdrawal of its stimulus measures and plans to end its asset purchases by March 2022, in the backdrop of rising prices and improvement in job market. It also likely to increase interest rates thrice in 2022. Bank of England increased its benchmark interest rate to 0.25% from 0.1%, citing a more persistent outlook on inflation and a tighter labor market. It has become the first major central bank to raise rates since the onset of the pandemic. Emerging market stocks gained 1.6% in December. China gained 2.1% for the month. The country has lowered its one-year loan prime rate by 5 bps to 3.8%, in a move to support economic growth.

Oil prices closed at USD 77.8 per barrel for the month, ending a volatile month in green. While concerns over the spread of Omicron variant and subsequent restrictions were negative triggers, reports on the lower severity of the variant supported the market. OPEC+ sticking to its plan of hiking output by 400,000 bpd in January while keeping open the option of adjusting supply as required was also perceived positively by the market. IEA has revised downwards its estimate for oil demand by 100,000 bpd for 2022 citing restrictions due to Omicron variant. However, the agency expects the recovery in oil market to continue.


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