GCC equity markets made small gains in July; Abu Dhabi flies high

Eid holidays hit trading volumes and values, says Kamco Invest

  
Investors speak as they monitor stocks at the Abu Dhabi Securities Exchange. Image for illustrative purposes

Investors speak as they monitor stocks at the Abu Dhabi Securities Exchange. Image for illustrative purposes

REUTERS/Stringer

The GCC equity markets reported gains, albeit marginal for the ninth consecutive month during July 2021, as monthly performance, though mixed, was skewed towards the gainers.  

According to the GCC Markets Monthly Report by Kamco Invest, Abu Dhabi and Kuwait markets had returns of 7.1 percent and 3.0 percent, respectively, while Saudi Arabia and Qatari benchmarks showed only marginal gains. Dubai, down 1.6 percent, was the biggest decliner. 

As a result, the MSCI GCC total return index recorded a flattish performance with a gain of 1 percent. Year-to-date (YTD) gains at the end of July stood at 23.7 percent, one of the best performances globally.

The sector performance chart also reflected the overall mixed trend during the month with a near equal split between gainers and losers. The Capital Goods index topped monthly performance chart with a gain of 10.2 percent followed by Pharma & Biotech and Utilities indices with gains of 4.7 percent and 4.2 percent, respectively. On the decliner’s side, the rally in the F&B index took a break resulting in a decline of 3.1 percent followed by Food & Drug Retailing and Consumer Durable & Apparel index with declines of 2.9 percent and 1.9 percent, respectively. Large-cap sectors like Banks and Energy showed flattish returns while Materials reported a gain of 3.2 percent.

UAE

The Abu Dhabi exchange continued upbeat during July, recording gains for the tenth consecutive month. The Abu Dhabi Securities Exchange (ADX) Index gained 7.1 percent during the month, the biggest monthly gain in the GCC, to close at 7318.2 points, a new record high for the benchmark.

Among sectors, Investment & Financial Services and Industrial indices notched monthly returns of 24.6 percent and 17.5 percent, respectively, while Insurance and the Banks were the only two sectors that reported declines during July.

Gains during last month further added to the exchange’s strong performance since the start of the year. The ADX index was the best performing market in the GCC as well as globally with a year-to-date gain of 45 percent.

Trading activity on the exchange plunged during the month, mainly due to the Eid break. Volumes traded stood at 3.45 billion shares versus 4.47 billion last month. Value traded fell 31 percent to 21.5 billion dirhams.

Dubai Financial Market (DFM) General Index fell for the first time in four months in July to close at 2,765.7 points, down 1.6 percent.

The slump during the month, however, did not derail much of the benchmark’s overall performance since the start of the year, which stood at 11 percent, maintaining its position as fourth-best index performer in the GCC.

Sector performance was mixed. Consumer Staples index witnessed the highest monthly returns of 4.1 percent followed by Services and Banks indices with gains of 2.6 percent and 0.3 percent, respectively. On the decliner’s side, the Real Estate index reported the biggest monthly fall of 4.1 percent followed by Transportation and Telecom indices with declines of 3.9 percent and 3.3 percent, respectively.

Trading activity on the exchange declined compared to previous month. Total volume of shares traded declined by 37 percent to reach 1.8 billion shares in July. Total value traded on the exchange declined by 49 percent to reach 2.4 billion dirhams in July compared to 4.7 billion dirhams during the previous month.

Saudi Arabia

The Tadawul TASI index rally continued for the seventh consecutive month during July, amid mixed sentiments towards emerging markets and local sector performance during the month. The index managed to breach the critical 11,000 points mark to close the month at 11,012.7 points.

The YTD performance was only slightly affected due to the marginal monthly gains and stood at 26.7 percent at the end of the month, the second-highest in the GCC and still one of the best globally.

Sector performance was mixed. The Software & Services index once again topped the monthly performance chart with a gain of 21.6 percent mainly led by 20.9 percent gain in shares of Al Moammar Information Systems and 22.9 percent gains for Arab Sea Information Systems.

The Utilities index was next on the gainers chart with a gain of 7.1 percent followed by Pharma and Materials indices with gains of 4.7 percent and 3 percent.

On the decliner’s side, Food & Beverage and Food & Staples Retailing indices topped, each declining by 4.2 percent led by a broad-based decline in constituent stocks

Trading activity declined steeply during June, due to the due to the Eid Holidays. Monthly volume of shares fell 51.8 percent month-on-month (m-o-m) to reach 4.2 billion shares.

Monthly value of shares traded also more than halved to reach 144.8 million riyals compared with 294.6 million riyals during June.

Kuwait

Kuwait’s equity market was up for the fifth consecutive month during July with almost similar performance across market segments. The Main 50 Index was once again the top monthly performer in July with a gain of 3.6 percent followed by 3.3 percent gain for the Premier Market Index and the Main Market index with a gain of 2.3 percent. The net impact was a gain of 3 percent for the All Share Market Index.

Monthly gains during July further strengthened the bourse's YTD gains making it the third-best performing market in the GCC since the start of the year with a return of 18.7 percent.

Most sectors ended July in the green. Consumer Services index topped with a gain of 6.2 percent followed by Financial Services and Banks indices with returns of 5.2 percent and 3.6 percent, respectively.

Total volume of shares traded during the month fell sharply due to the Eid holidays. Volume nearly halved to 4.3 billion shares compared with 8.3 billion shares traded during June. Monthly value traded also nearly halved m-o-m to 751.9 million dinars in July.

Qatar

The Qatar Stock Exchange reported marginal gains during July after two consecutive months of declines.

The QE20 benchmark closed the month at 110,753.3 points, a gain of 0.2 percent, in-line with the performance of the Qatar All Share Index that reported a similar monthly gain to close at 3,416.93 points.

The sector performance chart for July-2021 showed gains for Transportation and Insurance indices at 1.4 percent and 1.3 percent, respectively, and marginal gains of 0.5 percent for the Banks & Financial Services index. These gains were more than offset by declines mainly reported by Telecom Index at 2.7 percent followed by a marginal decline for the Industrials and Real Estate indices of 0.2 percent.

Trading activity on the exchange fell after gaining in the previous months. Total volume traded on the exchange more than halved to 1.6 billion shares in July. Total value traded also halved to 4.3 billion riyals compared with 8.7 billion riyals during June.

Bahrain

The Bahrain Bourse continued to report gains, albeit marginal, for the fourth consecutive month during July. Bahrain All Share Index closed the month at a 16-month high level but little short of the psychological mark of 1,600 points at 1,597 points with a gain of 0.6 percent

The Bahrain Boursa also announced new sector classification, the first since 1987. The new classification is more inclined towards global comparison and is based on the GICS classification.

Trading activity on the exchange saw a sharp m-o-m fall during July. Monthly volume of shares traded declined to 41.5 million shares compared with 178.7 million shares during June. Monthly value traded also fell to 10.5 million dinars in July compared to 22.1 million dinars the previous month.

Oman

After four months of gains the Omani stock market saw marginal declines during July. The index closed at 4,029.4 points with a decline of 0.8 percent led by a broad-based decline in all the three sectoral indices. The MSM 30 Index fell during the second half of the month after seeing consistent gains during the first half, retreating from a 17-month high of 4,132.33 points.

YTD, the MSX 30 Index gains slipped slightly to 10.1 percent.

The industrial index witnessed the biggest monthly decline among sectors at 3.1 percent followed by Services and Financial indices with declines of 0.5 percent and 0.3 percent, respectively. Despite the decline, the YTD performance for the Industrial index remained the highest at 36 percent followed by Financial and Services with returns of 14.1 percent and 7.7 percent, respectively, since the start of the year.

Due to the Eid holidays, trading activity plunged during the month. Total volume of shares traded during the month declined by nearly 49 percent to 342.1 million compared to a 37-month high recorded during June.

Monthly value traded also declined nearly 42 percent to 53 million rials in July.

(Writing by Brinda Darasha; editing by Seban Scaria)

brinda.darasha@refinitiv.com

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© ZAWYA 2021

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