GCC market slide continues amid global sell-off

Muscat: The GCC aggregate index declined for the second consecutive month during June-2022 tracking weak global trends as inflation and recession fears kept investors on the edge, according to a new report.

“The MSCI GCC index witnessed a steeper monthly drop than last month at 9.0 per cent in June-2022, witnessing a bigger drop than most other global equity markets,” the Kuwait-based Kamco Invest, and Investment Strategy & Research firm said in its latest GCC Markets Monthly Report.

Performance within the Gulf Cooperation Council (GCC) was mostly negative with Saudi Arabia witnessing the biggest and double-digit drop of 10.8 per cent followed by Abu Dhabi and Qatari benchmarks with declines of 6.8 per cent and 5.6 per cent, respectively, the report added.

Oman, on the other hand, was the only market that closed in the green with a marginal gain of 0.2 per cent.

Nevertheless, despite the two consecutive months of decline, the GCC aggregate index remained in the green in terms of the first half of 2022 performance at +2.8 per cent with all headline GCC benchmarks in the green barring Oman that reported a decline of 0.2 per cent.

Abu Dhabi bourse continued to boast double-digit returns of 10.4 per cent during the first half of 2022 followed by Kuwait and Qatar with returns of 5.2 per cent and 4.9 per cent, respectively.

The sector performance chart for the month showed declines across the board with all the sectors in the red. The Pharma & Biotech index reported the steepest decline of 19.4 per cent followed by Consumer Durable & Apparel and Diversified Financials with declines of 14.5 per cent and 12.9 per cent, respectively. Banks and Energy indices also dropped by 8.7 per cent and 5.0 per cent, respectively.

However, in terms of first-half 2022 performance, Energy and Banks still feature in the top five performing indices with gains of 16.6 per cent and 6.9 per cent, respectively.
Pharma & Biotech topped on the decliners side with a decline of 32.3 per cent followed by Consumer Durable & Apparel and Diversified Financials with declines of 30.2 per cent and 13.3 per cent, respectively, the Kamco Invest report said.

Muscat Securities Exchange
After recording a small monthly fall during May-2022, the Oman stock exchange was the sole gainer in the GCC during June 2022.

Oman’s MSX index recorded a marginal growth of 0.2 per cent during June-2022 to close the month at 4,122.56 points. In terms of sectoral performance, both the Services and the Industrial indices declined during the month by one per cent and 4.5 per cent to close at 1,566.6 and 5,759.3 points, respectively.

The Financial index showed the only growth with 0.9 per cent to close the month at 6615 points. The monthly trading activity on the exchange was mixed during the month after witnessing a decline during the previous month.

The total volume of shares traded during June-2022 was down marginally 0.6 per cent to reach 250.2 million shares as compared to 251.2 million shares during May-2022. Monthly value traded also witnessed a fall of 70.1 per cent to reach OMR116.7 million.

Saudi Arabia (Tadawul)
The Saudi Stock Exchange reported the steepest monthly decline in the GCC during June–2022 led by a global sell-off triggered by persistent worries about interest rates with inflation being a key focus for investors.

The index closed the month below the 12,000 mark for the first time since December 2021 at 11,523.25 points, witnessing a monthly decline of 10.8 per cent. The decline in TASI also affected the benchmark’s year-to-date 2022 performance which now stands at 2.1 per cent. During the month, the Saudi Central Bank increased its key interest rates by 50 basis points to 2.25 per cent and its reverse repo rate to 1.75 per cent from 1.25 per cent after the US Fed raised the rate by 75bps.

Abu Dhabi Securities Exchange
The FTSE ADX index fell from the best performing market in the GCC in May 2022 to the second-worst performing market in June 2022. The index registered a decline of 6.8 per cent to close the month at 9,374.7 points, but the benchmark maintains its lead in the GCC in terms of year-to-date 2022 gains at 10.4 per cent.

In comparison, the exchange’s market cap declined by 3.3 per cent during the month to AED1.8 trillion. In terms of sector performance, the Real Estate index recorded the biggest monthly fall among the indices registering a 15.3 per cent decline during the month to reach 6919.9 points.

Dubai Financial Market
The DFM General Index reported the smallest decline among the GCC markets in June-2022. The benchmark declined for the second consecutive month by 3.7 per cent to close at 3,223.29 points after witnessing significant declines during the middle of the month.

The monthly benchmark drop was led by a fall in seven out of nine sectoral indices including large-cap sectors such as Real Estate, Financial & Investment Services and Telecom sectors. The Financials & Investment Services Sector index posted a monthly fall of 10.5 per cent after shares of Dubai Financial Market (DFM) continued its declining trend during June-2022 registering a share price slide of 23.2 per cent during the month. The Real Estate sector index witnessed the second biggest monthly fall among the indices registering an 8.2 per cent drop to close the month at 4,731.1 points.

Boursa Kuwait
Kuwaiti benchmarks receded during June-2022 following a broad-based decline that affected most markets in the region as well as globally. In terms of market segments, the Main 50 Index witnessed the biggest monthly decline of 7.5 per cent as the performance of constituent stocks in the index was skewed downwards.
The Premier Market Index and the All-Share Market Index reported a monthly decline of 5.0 per cent and 5.3 per cent followed by the Main Market index which receded 6.4 per cent during June-2022.

Qatar Exchange
The Qatar Stock Exchange reported the third-biggest month-on-month decline for the second consecutive month during June-2022. The index closed the month at 12,191.3 points registering a decline of 5.6 per cent. Qatar All Share Index also reported a decline of 5.7 per cent, indicating a broad-based weakness in the market.
With the decline during June-2022, the year-to-date 2022 returns for the QE 20 index were slashed to 4.9 per cent. Comparatively, the QE All Share index reported a relatively higher year-to-date 2022 growth of 6.0 per cent.

Bahrain Bourse
Bahrain Bourse declined for the third consecutive month during June-2022 registering a drop of 4.2 per cent mainly led by monthly declines in six out of seven sectoral indices. The decline during June-2022 lowered the year-to-date 2022 gains for the aggregate benchmark to single digits at 2.4 per cent. For the second consecutive month, the Materials sector reported the biggest monthly decline registering a fall of 7.5 per cent followed by the Financials Services and Communications index with declines of 3.9 per cent and 3.4 per cent, respectively.