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KUWAIT CITY, Aug 6: Bloomberg News reported that in terms of the US dollar, the Kuwaiti, Abu Dhabi and Qatar stock exchanges are among the top 10 performing markets in the world this year, noting that however, Brent crude prices have fallen by 22 percent from their peak last June, which presents this high risk, reports Al-Rai daily.
Bloomberg added according to the investors there is limited scope for the listed stocks in the Gulf markets to continue their recovery, which competes with the performance of global markets in light of fluctuating oil prices and the slowdown in the global economy, due to the strict policies of central banks, noting that the region whose markets are dominated by banks and energy companies, benefited from the high interest rates and oil prices this year, as well as from US President Joe Biden’s meeting with Saudi Crown Prince Mohammed bin Salman last month. But investors are now concerned about lower oil prices and risks to corporate profits and global growth, amid continued tightening by the Federal Reserve and other major central banks.
The MSCI GCC Composite Index is up 7.9 percent this year after rebounding in July, compared to a 15 percent drop for the MSCI Global All-Country Index. The index in July also recorded its best monthly performance since January, outperforming other developing countries, and is now trading at a 43 percent premium on the MSCI Emerging Markets Index, nearly 3 times the average premium over the past ten years.
“Investors are still very cautious about how things are going here as they are in global markets, while corporate earnings have been mixed,” Bloomberg quoted Faisal Hassan, chief investment officer at Al Mal Capital. This could lead to a revision of the analysts’ estimates and thus the stock valuations. For his part, Hassanein Malik, a strategic analyst at Tellimer in Dubai, said: “The Gulf markets benefited from the normalization of USSaudi relations after Biden’s visit, the strong performance of banks’ profits and the stability of oil prices after the Federal Reserve’s less severe statements. However, much of the prospects for GCC resilience in the current global climate are being considered.
“Bloomberg” pointed out that it is certain that Gulf stocks still have their investors, indicating that the strategists at “Morgan Stanley” led by Marina Zavolok prefer financial institutions in the region, saying that they benefit from the ongoing reforms and raising interest rates, while they expect the shares to continue to outperform. In the region’s markets, the performance of emerging markets was influenced by reasons related to “extraordinary domestic macroeconomic conditions” and strong earnings dynamics, according to a note issued by the US bank on July 20.