Saudi gains push GCC index higher in February; Dubai recorded biggest decline

Kuwaiti and Qatari benchmarks reported mid to low-single-digit declines during the month

  
Stock market data on screen. Image used for illustrative purpose.

Stock market data on screen. Image used for illustrative purpose.

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The performance of GCC equity markets remained mixed during February 2021 with most showing marginal declines during the month. Saudi Arabia was the only positive performer during the month with a gain of 5.1 percent that pushed the broader GCC index in the positive zone with a monthly return of 3.5 percent, according to the GCC Markets Monthly Report by Kamco Invest.

Better-than-expected results by banks in the kingdom resulted in double-digit monthly gains for the index while most of other sectoral benchmarks also showed positive returns.

On the other hand, Dubai, which recorded positive performance during the previous three consecutive months, recorded the biggest decline during February. Kuwaiti and Qatari benchmarks also reported mid to low-single-digit declines during the month.

UAE

Abu Dhabi gained for the fifth consecutive month.  The Abu Dhabi Securities Exchange (ADX) Index closed the month at 5,663.62, up 1.3 percent, the second-biggest monthly growth in the GCC after Saudi Arabia.

Consumer Staples index topped with a gain of 26.3 percent led by 28.9 percent gain in shares of Agthia and 24.7 percent gain in shares of Ras Al Khaimah Poultry.

On the decliner’s side, the Insurance index topped with a drop of 2.9 percent followed by Industrial and Banks indices with declines of 2.0 percent and 0.6 percent, respectively.

On the regulatory front, the exchange lowered trading activity fees on all exchange transactions in a move to double the market cap on the exchange in the next three years. Transaction fees was lowered by more than 22 percent and ADX also created an annual incentive plan for brokerage firms that generate 20 million dirhams worth of trading commissions.

Volumes traded rose to 3.3 billion shares compared with 2.2 billion shares in January. Value traded jumped 78 percent m-o-m to 17.6 billion dirhams.

After three months of steady performance, Dubai Financial Market (DFM) General Index reported the biggest decline in the GCC during February.

The index closed the month at 2,551.54 points, notching a decline of 3.9 percent. The decline lowered the exchange’s year-to-date (YTD) 2021 returns to 2.4 percent.

The weak monthly performance was mainly led by a decline in large-cap sectors.

The Financial & Investment Services index reported the biggest monthly decline of 9.6 percent led by decline in shares of three largest constituents of the index i.e. DFM (-13.1 percent), Dubai Investments (-8.6 percent) and Shuaa Capital (-4.8 percent).

Sectors that proved resilient to the coronavirus pandemic gained. The Insurance index topped with a gain of 8.5 percent followed by Consumer Staples and Telecom indices with gains of 6.4 percent and 3.5 percent, respectively.

Activity on DFM nearly halved to a four-month low; volume traded fell more than 50 percent to 2.7 billion shares in February compared to the prior month. The total value of shares traded fell over 45 percent to 3.9 billion dirhams.

Saudi Arabia

The Tadawul TASI index saw the best monthly performance in the GCC during February.

The benchmark closed above the psychologically important mark of 9,000 points at 9,145.0 points resulting in a monthly gain of 5.1 percent. Most sectors performed well.

The Software & Services index, which rose last month, topped the monthly chart with a gain of 25.9 percent after both the constituent stocks in the index reported monthly gains of more than 20 percent.

The Diversified Financial Sector followed with a gain of 20.7 percent followed by Banks and Transportation indices with gains of 10.1 percent and 8.2 percent, respectively.

In the banking sector, the market breadth favored decliners with six banks whereas gainers included 5 banks. However, the double-digit gain in shares of Al Rajhi Bank, NCB, Bank Albilad and Samba Financial more than offset the decline in other banking stocks.

Trading activity recovered during the month. Total volume traded rose 45 percent to 6.9 billion shares. Value traded jumped 54 percent to 245.6 billion Saudi riyals.

Kuwait

Kuwaiti benchmarks receded during February following a broad-based decline that affected most sectors on the exchange.

The Premier Market index saw the largest decline of 2.4 percent. The Main 50 Index once again outperformed with the smallest monthly decline of 1.2 percent followed by the Main Market index that fell 1.9 percent. The All Share Index saw a decline of 2.3 percent.

The month also saw five new stocks added to the Premier Market index after Boursa Kuwait eased the inclusion requirements for the index last year.

At a sector level, most saw declines. The Insurance index reported the biggest decline of 14.5 percent.

Industrials index, shares of Agility declined by 12.4 percent following an adverse ruling by an international court related to the company’s Iraqi telecom unit. The banking index also declined by 2.4 percent.

Trading activity was flat during the month with volumes traded at 6 billion shares while the value traded stood at 835 million Kuwaiti dinars.

Qatar

The Qatar Stock Exchange’s QE20 benchmark fell 3.1 percent to 10,145.99 points. The sector performance chart showed gains only for the Transportation sector at a marginal 0.5 percent while the rest of the sectors reported declines.

Trading activity on the exchange declined for the third consecutive month, reaching the lowest in nine months. Total volume of shares traded declined by 20 percent to reach 3.2 billion shares. In terms of value traded, the decline was 23 percent reaching 7.8 billion Qatari rials.

Bahrain

The Bahrain Bourse reported marginal gains during February that came on the back of mixed performance of sectoral indices. The Bahrain All Share Index closed at 1,466.43 points, registering a decline of 0.3 percent during the month.

The Insurance index topped the monthly performance chart with a gain of 4.5 percent followed by Industrial and Commercial Banks indices with gains of 3.3 percent and 1.2 percent.

On the decliners’ side, the Services index topped with a fall of 3.9 percent followed by Hotels & Tourism and Investments indices with declines of 3.1 percent and 0.1 percent, respectively

Trading activity fell significantly during the month. Volume traded during the month fell to 87.7 million from 122.7 million in the previous month. Value traded however rose to 17.8 million Bahraini dinars from 16.6 million dinars.

Oman

The Omani stock market declined for the second consecutive month during February. The MSM 30 Index declined by 1.1 percent during the month to close at 3,612.38 points.  The decline pushed YTD-2021 declines further into the red at 1.3 percent.

In terms of sector performance, the Industry index showed marginal monthly gains of 0.33 percent whereas the Services and Financial Indices declined by 2.8 percent and 1.2 percent, respectively.

Trading activity improved during the month to reach the highest in 11 months. Volume traded during the month rose 42 percent m-o-m to reach 253.3 million. Value traded also rose, but at a smaller rate of 31 percent to reach 35 million Omani rials.

(Reporting by Brinda Darasha; editing by Daniel Luiz)

brinda.darasha@refinitiv.com

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© ZAWYA 2021

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