GCC markets see mixed returns as investors eye end to lockdowns
Kuwait indices eke out marginal gains in May
KUWAIT: A number of GCC economies have announced plans to gradually open the economy in the coming months post the ongoing lockdowns and support economic growth. The plans and the subsequent announcements boosted investor sentiment in the GCC, and drove the market to rally during the second half of May-2020 in most of the GCC benchmarks. On the other hand, confirmed COVID-19 cases accelerated in the region during the month to close slightly above the 200,000 mark.
In terms of sector performance for the month, MSCI GCC index was up more than 1 percent led by gains in most large cap sectors like Basic Materials and Telecom with gains of 5.5 percent and 3.1 percent, whereas Real Estate and Consumer Cyclicals declined by 6.4 percent and 4.7 percent, respectively. In terms of YTD-2020 returns, the Food & Beverage and Consumer Non-cyclicals sectors remained top performers with returns close to 30 percent, whereas the rest of the sectors were in the red. The Financial Services sector showed the biggest decline of 23 percent followed by Real Estate and Consumer Cyclicals with declines of 22.9 percent and 18.1 percent, respectively.
Banks were also in the red with a decline of 17.7 percent.
Global benchmarks were also positive across the board with MSCI World index posting a monthly gain of 4.6 percent, although the tensions between Hong Kong and China proved a dampener. Investors were also waiting for the renewed US/China trade talks and were calmed after the US announced that it would not impose any new tariffs or sanctions against the country, despite rising tensions. On the other hand, the world also eyed the cautious opening up of the economies across the globe going against majority of the expert opinions that it could lead to reemergence of Covid-19 cases. On the contrary, gains in international benchmarks is pricing in that the worst of the Covid-19 crisis is behind while marking the second consecutive month of gains and one of the fastest 2-month gain since the financial crisis.
Kuwait
Kuwaiti benchmarks continued to be in the green during May-2020 but gains were marginal led by largecap stocks. The Kuwait All Share Index gained 0.4 percent primarily on the back of the 1.4 percent gain in the
Kuwait Premier Market Index. These gains were partially offset by decline in the Main Market Index and the Main 50 Index by 1.8 percent and 3.6 percent, respectively. Premier market gains reflected double digit surge in shares of Boubyan Petrochemicals (+10.1 percent) followed by 4 percent gain in shares of NBK and GBK. On the other hand, Mabanee, NIND and Warba Bank were key decliners with double digit fall in their shares that partially offset monthly performance. In terms of YTD2020 performance, all the Kuwaiti benchmarks continue to remain in the red with the All Share Index falling by 20.5 percent.
In terms of sector performance, the Basic Materials index witnessed the biggest monthly gain of 5.5 percent primarily on the back of gain in shares of Boubyan Petrochemicals and Qurain Petrochemicals by 10.1 percent and 2.9 percent that was partially offset by decline in shares of Kuwait Foundry. The Insurance index was next with a gain of 1.1 percent followed by marginal gain of 0.7 percent in Banks and Real Estate indices. In terms of YTD-2020 performance, only the Consumer Goods sector was in the green with a gain of 14.0 percent whereas most of the sectors showed double digit declines led by the Covid-19 and oil rout led sell-off.
The monthly share performance chart was topped by Dar Al-Thuraya Real Estate Co with its shares more than doubling during the month, although trades in the stock were minimal. Real Estate Trade Centers was next with a gain of 48.6 percent followed by Bayan Investment and Al-Masaken International with gains of 44.9 percent and 36.3 percent. On the other hand, prominent decliners during the month included National Investments with a fall of 17.7 percent followed by AUB Kuwait and Tamdeen Real Estate with declines of 15.1 percent and 11.1 percent, respectively.
Trading activity on the exchange declined for the second consecutive month but was mainly led by Eid holidays and seasonal slowdown. As a result, both volume and value traded during the month reached the lowest in 18 months. Monthly volume of shares traded dropped by a third to reach 2.1 billion shares in May2020 as compared to 3.2 billion shares in April-2020. The aggregate value of shares changing hands during the month also declined by a slightly higher 41.0 percent to reach KD 441 million vs. KD 747 million during April2020. AUB Bahrain once again topped the monthly volume chart for the third consecutive month with 570.4 million shares traded followed by KFH and KIB with 152.5 million shares and 136.3 million shares, respectively. On the monthly value traded chart, AUB Bahrain topped with KD 101.4 million worth of shares changing hands during the month followed by KFH and NBK at KD 90.1 million and KD 60.2 million respectively.
Saudi Arabia (Tadawul)
After witnessing strong gains during April-2020, Saudi stock market once again witnessed gains during May-2020, albeit marginal, led by a late month rally. Gains came on the back of oil price surge that coincided with government’s plan to reopen the economy in a gradually manner over the next few months. The benchmark TASI was up 1.4 percent during the month to close at 7,213.03 points following gains of 11 percent after the benchmark bottomed on 11-May-2020 at 6,603.96 points. The gains during May-2020 resulted in a slightly lower YTD-2020 decline of 14 percent.
Abu Dhabi Securities Exchange
The ADX index declined by 2.1 percent m-o-m in May-2020 after rebounding by 13.3 percent m-o-m in April-2020. The index closed at 4141.614 points at the end of the month, as most sectors barring Industrials and Telecoms closed lower m-o-m. Consumer Staples was the worst performing index, and declined by 9.7 percent m-o-m, as Agthia group plunged by 12 percent in May2020. Energy names fell by 4.9 percent m-o-m in May2020, as Dana Gas declined by 12.6 percent m-o-m. Real Estate also witnessed declines of 4.7 percent in May2020,
after recovering by 16.7 percent m-o-m in April2020. Aldar was down 4.4 percent for the month, as the company recorded AED 1.76 billion in revenues for Q120, unchanged from last year.
Qatar Exchange
After witnessing gains of 6.8 percent m-o-m in Apr2020, the QE-20 index witnessed stabilizing trends and gained by 0.92 percent May-2020. The Qatar All Share index which maps the broader market moved up by 0.95 percent, but sectoral performance for the month was mixed. Industrials and Real Estate were the best performing indices and gained by 7.6 percent and 4.3 percent respectively m-o-m. Qatar National Cement (+11.8 percent) and Mesaieed Petrochemical (+11.7 percent) were the best performing industrials names while United Development (+10.9 percent) and Ezdan Real Estate (+4.2 percent) led the real estate sector.
Bahrain Bourse
The Bahrain Bourse continued its declining trend into May-2020, and receded by 3.1 percent m-o-m. The index close at 1269.63 points as sectoral index was negative. Commercial Banks were down by 4.0 percent mo-m, followed by declines from Investment names (-2.6 percent) and Industrials companies (-2.1 percent). In YTD terms, barring the Insurance sector, all other sectors remain in the red as of end May-2020.
Muscat Securities Market
The Omani stock market closed flat during May2020 after gains during the last week of the month offset declines since the start of the month. The MSM30 index closed the month at 3,544.58 points resulting in a YTD2020 decline of 11 percent by the end of May-2020. Sectoral trends were mixed during the month with 2.0 percent gain in the Industrial index, almost flat gains for the Financial index and a decline of 5 percent recorded in the Services index during the month.