Capital Market

What Moved GCC Equity Markets?

Jenevivu Lasrado

07 October 2021

  • S&P GCC composite index rose by 1.5%, with Qatar and Saudi Arabia leading the gainers. Qatar’s main index rose 3.5% for the month, while Abu Dhabi ended the month mildly positive. Dubai markets gave up some of the sharp gains witnessed in the month of August, closing 2.0% down for the current month.
  • Abu Dhabi continues to be the top performer for the year, supported by the rise in oil prices, strong earnings and favourable valuations. Despite the run-up in Abu Dhabi markets, the Price to Earnings multiples remain lower than Saudi markets.
  • Corporate Earnings in the GCC during H1 2021 have surpassed H1 2019 levels, with commodity related stocks rebounding strongly due to the rise in oil prices in the first half of 2021. Profitability of banking stocks remain under pressure due to higher precautionary provisioning.
  • The Central Bank of UAE (CBUAE) decided to gradually unwind stimulus measures introduced to mitigate the economic slowdown caused by COVID-19 after its positive assessment of the UAE’s financial system. CBUAE will begin the withdrawal of its Targeted Economic Support Scheme (TESS) to avoid restricting credit supply and economic growth.
  • UAE is looking at potential replacements for EIBOR - the Emirates Interbank Offered Rate, as it tries to catch up with global regulators who have called time on such benchmarks after banks' attempts to rig them.
  • Saudi Arabia has revised its forecast for FY 2021 budget deficit to 2.7% of GDP from 4.9% and is aiming for a further cut next year.
  • Unemployment rate among Saudi nationals fell to 11.3%, the lowest in a decade, in Q2 2021 from 11.7% in Q1 2021.
  • Among the GCC blue chip companies, the best performer was Industries Qatar, which gained 20.2% during the month, followed by UAE’s First Abu Dhabi Bank, which gained 4.6%.

Market Performance & Key Metrics

Performance of S&P GCC Total Return Index

Key Economic Forecasts - 2022f Source: Refinitiv, IMF; ADVT – Average Daily Value Traded, TTM – Trailing 12 months, FF Adj. Mkt. Cap. – Free Float Adjusted Market Capitalization

The article is an excerpt from our “Global & GCC Capital Markets Review: September 2021” report. Read more

Stay Tuned To Marmore MENA Insights!

Never miss a patch or an update with Marmore's Newsletter. Subscribe now!

Related Article

Are ESG and Sustainable investing the same?

ESG and Sustainable Investing might seem to be related but both are distinct concepts. The GCC nations transition towards cleaner energy portrays a buoyant outlook for ESG and sustainable investing.

Read More

Business Impact of IFRS Sustainability Standards for GCC

The impact of the recently issued IFRS sustainability standards, once adopted, is likely to be high, as GCC companies scramble to allocate adequate resources for the adoption.

Read More

SoE Privatization Initiatives in the GCC: Implications for Equity Capital Markets through IPO’s

The GCC countries have increasingly focused on privatization of state-owned enterprises to reduce dependency on oil and diversify their economies.

Read More

Tags

Share via

Downloads

Recent Insights

Card image

Are ESG and Sustainable investing the same?

Read More
Card image

Business Impact of IFRS Sustainability Standards for GCC

Read More
Card image

SoE Privatization Initiatives in the GCC: Implications for Equity Capital Markets through IPO’s

Read More