Markaz: Vaccine approval helps GCC markets recover most of the year's losses

S&P GCC composite index stages a recovery in the second half of 2020

  

Kuwait: Kuwait Financial Centre “Markaz” stated in its 2020 Markets Review Report that GCC equity markets staged a strong recovery towards year year-end after pharmaceutical firms Pfizer, Moderna and AstraZeneca, announced the deployment of their respective COVID-19 vaccines. The vaccines were approved and purchased by several governments; including many GCC countries. These developments raised investors’ hopes of an eminent recovery in global economic growth in 2021 and helped GCC stock markets recover their losses.

Markaz’s report also referred to Kuwait’s inclusion in the MSCI Emerging Markets Index, which took place in November 2020. Among Kuwait’s sectors, insurance was the top performing sector in 2020, rising 24%. Financial services, the sector with the largest market capitalization by aggregate, was down 13% for the year. With regards to stocks in Kuwait’s premier stock segment, Human Soft Holding Company was the top performer with a yearly gain of 24%.The Kuwait All Share index declined by 11.7%, while its index PE ratio stood at 20, a premium of 33% compared to S&P GCC index.

Regionally, Markaz’s report stated that the S&P GCC composite index erased most of the losses for the year and is marginally down 1.7% for the year. Saudi Arabia (Tadawul) and Qatar stocks ended 2020 in the green, rising 3.6% and 0.1%, respectively. Abu Dhabi, Oman, Bahrain and Dubai stocks ended the year with losses of 0.6%, 8.1%, 7.5% and 9.9%, respectively. The report also stated that among Saudi blue chips, Al-Rajhi Bank was the top performer in 2020, gaining 13.3%. Other GCC Blue chips include UAE’s Abu Dhabi National Energy Company (TAQA) that rose 170% this year and Qatar’s Ezdan Holding which rose 191%.

Global equity markets witnessed a strong rebound after substantial falls in March, with the MSCI World Index finishing the year up 14.1%. U.S. markets (S&P 500) recovered from the lows of March, where it reached new highs by October, and ended the year up 16.3%. On the other hand, U.K (FTSE 100) index ended the year down 14.3% due to Brexit and COVID-19 concerns. Emerging markets increased by 15.8% for the year as investors became optimistic about riskier assets due to vaccine development and continued monetary easing measures by central banks in the U.S and Europe.  

Oil prices closed at USD 51.8 per barrel at the end of the year, posting a yearly loss of 21.5%. Oil markets recovered some of the losses from earlier in the year buoyed by favorable results in COVID-19 vaccine trials, which raised hopes of swift demand recovery for oil as governments around the world could fully reopen their economies and oil-dependent sectors, like travel and tourism, could make a comeback. Oil prices were also supported by production cuts by the OPEC+ group to reduce over-supply, which are set to continue in 2021 as well.

Regional Market Trends – December 2020

Equity

Last close

December%

2020 %

S&P GCC

114

0.7

-1.7

Saudi Arabia (TASI)

8,747

-0.7

3.6

Qatar (QE Index)

10,262

1.7

0.1

Abu Dhabi (ADI)

4,965

1.6

-0.6

Kuwait (All Share PR Index)

5,459

1.6

-11.7

Dubai (DFMGI)

2,420

3.0

-9.9

Bahrain (BAX)

1,478

0.8

-7.5

Oman (Muscat SM)

3,644

0.4

-8.1

Commodities

   

IPE Brent ($)

51.8

8.8

-21.5

Gold ($)

1,896.5

6.7

25.0

Source: Refinitiv

-Ends-

About Kuwait Financial Centre “Markaz”

Established in 1974, Kuwait Financial Centre K.P.S.C “Markaz” is one of the leading asset management and investment banking institutions in the MENA region with total assets under management of over KD 1.03 billion as of 30 September 2020 (USD 3.37 billion). Markaz was listed on the Boursa Kuwait in 1997. 

For further information, please contact:
Sondos S. Saad
Media & Communications Department
Kuwait Financial Centre K.P.S.C. "Markaz"
Tel: +965 2224 8000
Fax: +965 2246 7264
Email: ssaad@markaz.com 

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