Equity markets expected to witness increased volatility in the coming weeks

Allied Investment Partners PJSC Market Report

  

Global equities performed negatively during the week as investors were concerned about resurgence in COVID-19 cases. Economic indicators continue to show improvement from the previous month, which helped in capping the losses during the week. However, the rise in new cases has dented the optimism of a faster recovery and rebound in corporate earnings.

Moreover, the rise in new cases could possibly lead to another lockdown in certain parts of the US and around the world, which will delay the recovery process. Oil prices were down 2.77% during the week as rise in new cases has renewed fears of lower demand amid record-high stockpiles.

For the region, the performance was mostly positive with 5 out of the 7 regional indexes closing in green while 2 closed in red. Saudi Arabia was the worst performing index regionally as it was down 1.68%, followed by 1.37% in Abu Dhabi. Bahrain was the best performing index regionally with gains of 0.40%, followed by 0.39% in Dubai, 0.38% in Kuwait, and 0.30% in Egypt.

Going forward, investors will reassess their portfolios to reduce the overall risk amid the rising uncertainties post the resurgence in COVID-19 cases. Moreover, equity markets might witness increased volatility in the coming weeks as odds of downside risk are rising post the sharp rebound in equities since mid-March.

For the region, investors should remain selective in participating during the current market dynamics as companies with strong balance sheet and flexible business models should emerge stronger and bigger from the pandemic. NCB exploring a deal to acquire Samba Financial Group, an important development in the Saudi Arabian banking sector is likely to encourage other banks and sectors in the region to follow similar path amid rising uncertainty and a challenging economic environment.

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About Allied Investment Partners PJSC

Established in 2007, Allied Investment Partners PJSC is licensed by Securities and Commodities Authority, UAE and is a leading investment firm providing various services like Asset Management, Alternative Investments, Wealth Management, Securities and Custody Services, Corporate Finance and Investment Banking Advisory.

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