Markaz: Most GCC markets gain as lockdown restrictions ease and oil prices rise

S&P GCC composite index gained 1.7% in July

  
Markaz: Most GCC markets gain as lockdown restrictions ease and oil prices rise

Kuwait:Kuwait Financial CentreMarkaz” recently released its Monthly Markets Review report for the month of July 2020. Markaz report stated that, most GCC equity markets extended their positive run for the fourth consecutive month in July, aided by easing of lockdown restrictions and the rise in oil prices. Global markets were buoyant as central banks continue to flood the markets with liquidity.

Kuwait markets were negative, with the Kuwait All Share index registering a decline of 3.2% in July. There were further delays in passing the country’s debt law, which is key for funding Kuwait’s deficit. The public debt law which would allow it to borrow KD 20 billion over 30 years is still under discussion in the parliament. S&P has downgraded Kuwait’s outlook from stable to negative citing that the country’s General Reserve Fund might not be sufficient to cover its deficit in 2020. The agency estimates this year’s deficit to be at 40% of GDP. The earnings numbers released so far also added to the negative sentiment. During H1 2020, National Bank of Kuwait’s net profit has declined by 46.9% y-o-y and Zain has reported a 14% y-o-y decline. Among sectors, healthcare index was the top gainer, rising 2.2% while Basic materials index saw the biggest decline, down 6.7% for the month.  

Regionally, the S&P GCC composite index gained 1.7%, with all markets barring Kuwait and Dubai staying in the green. Qatar gained 4.1% in July followed by Saudi Arabia and Oman markets which gained 3.3% and 1.5% respectively. OPEC+ agreement to cut production by 7.7 million barrels a day from August encouraged GCC investors. According to S&P, Dubai’s GDP is set to shrink by 11% in 2020. Moody’s has opined that rentals and home sales are set to decline in UAE, particularly in Dubai, over next 12-18 months. Saudi Arabia has posted a deficit of USD 29.12 billion in the Q2 2020. Oil revenues fell by 45% y-o-y and total revenues had dropped 49%. In the backdrop of Saudi Arabia’s tripling of VAT from 1st July 2020, IMF has opined that it might not be the right time to hike or introduce new taxes in GCC.

Markaz report also stated that among the GCC Blue Chip companies, TAQA (Abu Dhabi) and Ezdan Holdings (Qatar) saw huge gains in July, rising by 94% and 25% respectively. TAQA’s stock price shot up, spurred by the company’s closing of Fujairah F3 power project agreement, valued at USD 1.14 billion.

The performance of Global equity markets was positive, driven by influx of liquidity by central banks and the EU leaders’ agreement over the coronavirus recovery deal with the MSCI World Index gaining 4.7% in July. U.S. (S&P 500) gained 5.5% in July and erased its losses on a year-to-date basis. The gains were supported by reports of growth in earnings from tech giants even as the surge in cases threaten setbacks in reopening of the economy. The UK (FTSE 100) markets lost 4.4% for the month. Emerging markets witnessed strong buying, rising 8.4% for the month.

Oil prices closed at USD 43.3 per barrel at the end of July 2020. This translates to a monthly gain of 5.2%, on the back of production cuts and easing of lockdowns. OPEC+’s compliance to the agreed oil output cuts was at 107% in June. According to EIA, U.S. crude oil production plummeted by a record 2 million bpd in May. Gold prices continued to rise, increasing 10.9% in July.


Source: Refinitiv

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 1.14 billion as of 31 December 2019 (USD 3.77 billion). Markaz was listed on the Boursa Kuwait in 1997.

For further information, please contact:
Sondos Saad
Media & Communications Department
Kuwait Financial Centre K.P.S.C. "Markaz"
Email: ssaad@markaz.com    
markaz.com 

Send us your press releases to pressrelease.zawya@refinitiv.com

© Press Release 2020

Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.

The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.

To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.