GCC stock markets turn positive in July

GCC markets turned positive in July as second-quarter corporate earnings lifted sentiment in addition to positive reports from rating agencies, Markaz said in its monthly report on Monday.

MSCI GCC gained five per cent for the month, bringing the year-to-date gain to four per cent. The index underperformed MSCI EM and MSCI BRIC for the month but is outperforming the indices on a yearly basis as the former is up 0.22 per cent while the latter is down 2.55 per cent.

All GCC markets saw gains, except Bahrain that shed 0.17 per cent. Gains were led by Kuwait’s Weighted Index that was up 5.5 per cent for the month as blue chips saw gains on the back of healthy second-quarter results. Kuwait contributed the most to the GCC YTD return, on a market cap basis, with a 2.5 per cent gain, Markaz said.

GCC markets saw gains in July as fairly positive second-quarter results rolled in, in addition to positive reports from the IMF on the state of the region. Oil prices gained three per cent for the month.

The Saudi market gained three per cent despite earnings disappointments buoyed by stable crude oil prices. Blue chips gained despite poor results; Al Rajhi Bank and Samba Financial Group gained six per cent and five per cent, respectively, despite H1 earnings declines of one per cent and three per cent, respectively.

Kuwait firms saw fairly healthy quarterly results; Gulf Bank swung to a profit of KD2 million after posting losses in the same period of the previous year. NBK posted a 10 per cent growth in second-quarter earnings and provisions of $81m for the same period.

Liquidity continued to dry up across the GCC in July, as volume and value traded declined a further five per cent and 27 per cent, respectively. In terms of volume, all markets saw declines, except Kuwait where volume traded was up 70 per cent for the month, value traded in Kuwait was up 23 per cent to $2.46 billion.

Volatility in the GCC was down 40 per cent in July, led by the UAE markets where MVX Abu Dhabi and MVX Dubai declined 48 per cent and 39 per cent, respectively.
The UAE markets saw gains during the month, boosted by some positive corporate earnings figures.

World markets also saw gains in July as positive economic signals emerged from Developed Europe. MSCI World gained eight per cent in July after losing three per cent in June.

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