Inflation, recession fears keep GCC market on edge – News

The MSCI GCC Index saw a steeper monthly decline than last month at 9.0% in June, a steeper decline than most other global equity markets, according to Kamco Invest’s GCC Monthly Market report.



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Published: Sun 3 Jul 2022, 10:59 PM

Last update: Sun, Jul 3, 2022, 11:02 PM

Following weak global trends, the GCC aggregate stock index fell for the second consecutive month in June 2022, as inflation and recession fears kept investors on edge.

Dubai’s general DFM index recorded the smallest decline among GCC markets in June 2022, while Abu Dhabi‘s FTSE ADX index fell from the best performing GCC market in May 2022 to the second worst performing market performance in June.

The MSCI GCC Index saw a steeper monthly decline than last month at 9.0% in June, a steeper decline than most other global equity markets, according to Kamco Invest’s GCC Monthly Market report.

Performance within the GCC was mostly negative, with Saudi Arabia registering the strongest and a double-digit decline of 10.8%, followed by benchmarks Abu Dhabi and Qatar with declines of 6, 8% and 5.6%, respectively. Oman, on the other hand, was the only market to close in the green with a marginal gain of 0.2%.

Nevertheless, despite the two consecutive months of declines, the GCC aggregate index remained in the green in terms of performance in 1H-2022 at +2.8%, with all GCC benchmarks in the green, at except for Oman which recorded a drop of 0.2%.

Abu Dhabi continued to post double-digit returns of 10.4% in the first half of 2022, followed by Kuwait and Qatar with returns of 5.2% and 4.9%, respectively.

In June, the FTSE ADX index fell from the best performing GCC market in May 2022 to the second worst performing market during. The index fell 6.8% to close the month at 9,374.7 points, but the benchmark maintains its lead in the GCC in terms of YTD-2022 gains at 10.4%. In comparison, the market capitalization of the exchange fell by 3.3% during the month to reach 1.8 trillion dirhams. In terms of sector performance, the real estate index recorded the largest monthly decline among the indices, registering a drop of 15.3% during the month to reach 6919.9 points.

Trading activity on the ADX fell for the second consecutive month in June 2022. The total volume of shares traded reached 3.9 billion shares in June 2022, compared to 4.9 billion shares traded in May 2022, registering a decrease of 18.8%. The monthly value traded decreased by 6.6% to reach 28.1 billion dirhams in June 2022, against 30.1 billion dirhams.

In Dubai, the benchmark DFM General Index fell for the second consecutive month by 3.7% to close at 3,223.29 points after posting significant declines in the middle of the month. The monthly decline in the benchmark was driven by the fall in seven of nine sector indices, including large-cap sectors such as real estate, financial and investment services, and telecommunications sectors. The financial and investment services sector index recorded a monthly decline of 10.5% after shares in the Dubai Financial Market continued their downward trend in June 2022, recording a decline in the price of the share of 23.2% during the month.

The real estate sector index saw the second largest monthly decline among indices, registering an 8.2% drop to end the month at 4,731.1 points, mainly on the backs of Union Properties and Emaar Properties, recording share price declines of 12.5% ​​and 8.9%, respectively. .

Shares of Emaar Properties rose earlier this month after S&P raised the company’s outlook from stable to negative.

Across the GCC, the sector performance chart for the month showed declines across the board, with all sectors in the red. The Pharma & Biotech index recorded the largest drop of 19.4%, followed by Consumer Durable & Apparel and Diversified Financials with declines of 14.5% and 12.9%, respectively. The banking and energy indices also fell 8.7% and 5.0%, respectively. However, in terms of 1H-2022 performance, energy and banks are still in the top five performing indices with gains of 16.6% and 6.9%, respectively. Pharma & Biotech led the declines with a decline of 32.3%, followed by Consumer Durable & Apparel and Diversified Financials with declines of 30.2% and 13.3%, respectively. [email protected]

About Tammy N. McFarlane

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