Global markets remain upbeat, GCC flat

May was a green month for most of the world, not including the GCC. Global equities ended the month on a positive note, up 1.9 percent. The MSCI Emerging Market Index also continued to perform well, up 2.8 percent. The FTSE 100 was the best performing, rallying to 4.4 percent. The British market reached an all-time high of 7,547.63 during the month. Other major markets ended the month with gains, whereas the GCC region was down 1.3 percent. Commodities had a relatively mixed performance for the month, with Gold unchanged at 0 percent and Brent down 2.8 percent.

US Manufacturing shrank slightly although remained above 50, with the ISM Manufacturing PMI for May coming in at 54.9, slightly higher than April’s 54.8. The labor market continues to be healthy with Initial Jobless Claims at 248,000, higher than market expectations of 239,000. Durable Goods Orders fell 0.7 percent in April, its first decline in 2017. Housing Starts along with Building Permits also fell in April, down 2.6 percent and 2.5 percent, respectively. Retail Sales gained 0.4 percent in April, missing market expectations of a 0.6 percent gain. Existing Home Sales was increasing 2.4 percent. Exports and Imports from China both rose in May, however not as much as a month earlier. Exports rose 8.0 percent from a year earlier, slowing from a 16.4 percent rise in March. Imports increased by 11.9 percent year-on-year to $141.9 billion in April, after a 20.3 percent increase in the previous month. Overall, the country recorded a trade surplus in April of RMB 262.3b compared to RMB 164.3b in March. The Caixin Manufacturing PMI for the month of May was 49.6 compared to 50.3 in the previous month while the Non-Manufacturing PMI was slightly higher at 54.5 from 54.0 in April.

Chinese equities, as measured by the Shanghai Stock Exchange Composite Index, reported a loss of - 1.2 percent in May. The GCC equity markets were all red for the month of May, with MSCI GCC Index posting a loss of -1.3 percent. Dubai, Abu Dhabi, and Saudi Arabia posted the largest losses, closing at -2.2 percent, -2.1 percent and 2.0 percent, respectively. Oman and Qatar both closed at -1.6 percent, while Kuwait had the least losses, shedding -0.9 percent. Within the MENA region, Egypt’s equity market, as measured by the EGX 30 posted a gain of 7.3 percent.