In terms of year-to-date (YTD) returns, the October decline once again pushed all the GCC equity markets back in the red with DFM showing the biggest drop of 21 percent, while Saudi Arabia’s TASI showed the smallest decline of 5.7 percent.
Sector-wise too there was a broad-based decline with only defensive sectors showing gains during the month.
In terms of country performance, the UAE benchmarks ended the month mixed. The Abu Dhabi Securities Exchange (ADX) Index was the only market in the GCC to close on a positive note. Dubai Financial Market (DFM) General Index fell after two consecutive months of gains.
The DFM General Index fell 3.8 percent lower month-on-month (m-o-m) at 2187.90 points with all sectors showing declines.
The Consumer Staples index topped the decliners as it fell 13 percent. The Insurance index fell 8.5 percent while Banking and Transportation indices lost 6.4 and 5.3 percent respectively. Emirates NBD dropped nearly 11 percent after it reported a 55 percent y-o-y decline in net profit for M9-2020.
Telecom and Services were the only indices that recorded gains during the month at 5.3 and 4.6 percent, respectively. Du shares surged after a doubling of Q3 net profit to 824 million dirhams.
Volumes traded on DFM fell by 54 percent m-o-m to reach 4 billion shares. The total value of shares traded dropped to 3.2 billion dirhams.
Abu Dhabi Securities Exchange (ADX) Index closed the month 3.1 percent higher at 4660.04 points. The monthly gain lowered YTD-2020 decline for the index to 8.2 percent, the third lowest in the GCC.
Most sectors performed well. Real Estate topped the chart with a gain of 34.1 percent that reflected Aldar Properties’ 36.3 percent gain. Shares of the property developer surged 29 percent in two consecutive trading sessions after it signed a deal with state-owned ADQ worth 30 billion dirhams.
Consumer Staples gained of 17.7 percent followed by Insurance and Banking indices with relatively smaller gains of 4.5 percent and 2.0 percent, respectively. Commercial Bank International gained 7.7 percent while FAB rose 2 percent.
On the decliners’ side, the Energy index topped with a decline of 2.6 percent.
Volumes traded fell by a third to 2.3 billion shares. Value traded declined 18 percent m-o-m to 9.7 billion dirhams.
The Tadawul TASI index dropped for the first time in seven months, closing 4.7 percent lower. The index went below the 8,000 mark on the last day of the trading to reach a two-month low of 7,907.7 points. YTD-2020, the index has declined 5.7 percent, the smallest decline in the GCC.
Most sectors declined during the month. Consumer Durables & Apparels index showing the biggest drop of 18 percent due to double digit declines in four out of six constituents in the index. The Diversified Financials Index was next with a decline of 17.8 percent followed by Media and Consumer Services indices both declining by 14.7 percent. Large-cap sectors like Capital Goods and Energy showed high single digit declines during the month whereas Banks and Telecom fell by 1.6 percent and 1.5 percent, respectively.
The small cap Software & Services sector gained nearly 11 percent followed by Utilities and Food & Staples Retailing indices with gains of 8.4 percent and 3.3 percent, respectively.
Trading activity waned from the high levels seen in recent months. Total volume traded fell nearly 20 percent to 9.3 billion shares. Value traded also declined by a similar factor to 221.3 billion Saudi riyals from 257.5 million riyals in September.
The declines came as COVID-19 related lockdowns across Europe and several other cities across the globe led to a 14 percent decline in oil prices from the peak of the month. On the other hand, the Kingdom’s efforts to boost private sector activity were reflected in the PMI for September that showed growth for the first time since February, 2020. During October, the government also lowered the VAT rate on real estate transactions to 5 percent from 15 percent.
All Borsa Kuwait benchmarks remained mostly flat during October as gains made early in the month were nearly wiped out during the second half.
The Main 50 Index showed gains of 1.5 percent during the month that led to a 0.7 percent gains for the Main Market index. On the other hand, the Premier Market index declined by 0.3 percent, resulting in flat monthly performance for the All Share Market Index.
Performance in the Premier Market index was swayed by decline in heavy weight stocks although the bulk of the stocks in the index were in the green. In terms of YTD-2020 performance, the Main Market index showed the smallest decline of 11.8 percent followed by the Main 50 Index at a decline of 12.1 percent whereas the Premier Market index decline stood at 13.9 percent.
At a sector level performance was mixed. The Industrial and Oil & Gas indices topped the monthly performance chart with similar gains of 2.4 percent for the two sectors followed by Telecom and Basic Materials indices with gains of 2.2 percent and 1.1 percent, respectively.
There was higher trading in large-cap stocks and as a result the monthly volume and value traded showed diverging trends. Volume traded during the month declined by a quarter to reach 6.2 billion shares compared to 8.3 billion shares traded in the previous month. However, the value traded increased by 6.5 percent to reach the highest since January-2017 at 1.15 billion Kuwaiti dinars as compared to 1.1 billion Kuwaiti dinars during the previous month.
After recording gains for four consecutive months, the Bahrain Bourse closed in the red at 1,427.18 points with a marginal m-o-m decline of 0.5 percent. The Bahrain All Share Index hit a monthly peak gain of 3.33 percent to reach 1,482.24 points by mid-month, but consistent daily declines during the second half of the month pulled down the index. The YTD-2020 decline for the index reached 11.4 percent by month-end.
Trading activity remained mixed during the month with higher trades in cheaper stocks. The Insurance Index gained 6.6 percent while the Services index added 6.4 percent. On the decliners’ side, the Commercial Banks index fell 2.1 percent followed by Industrial and Investment indices with declines of 2 percent and 1.3 percent, respectively.
The Muscat Securities Market declined in for the second consecutive month in October. The MSM 30 Index fell 1.6 percent to close at 3,557.77 points.
These monthly declines also damped Oman’s YTD-2020 performance to a decline of 10.6 percent.
The decline came after the 2.93 percent m-o-m gain in the Services index and 1.23 percent gain in the Industrial index were more than offset by a decline of 3.63 percent in the Financials Index during the month.
Trading activity rose during the month. Volume traded during the month rose 76 percent m-o-m to reach 191.6 million. Value traded also rose 77 percent to 29.9 million Omani rials compared to 16.9 million rials in September.
(Writing by Brinda Darasha, editing by Seban Scaria)
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© ZAWYA 2020