Rebalancing Portfolios Should Weigh on Regional Equities in Coming Weeks

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Global equity markets extended the positive streak for the fifth consecutive week on the back of US-China agreeing to cancel tariffs in phases and dovish tone of global Central Banks. Furthermore, corporate earnings in Q3 2019 has also supported equity markets in continuing the positive momentum.

Given that global growth environment is beginning to stabilize on the back of recent developments, equity markets should continue remain in positive territory.

For the regional markets, trading activity was largely positive as it was supported by domestic factors and corporate earnings. During the week, 5 out of the 8 indexes closed in green while 3 closed in red. Egypt was the best performing index regionally with gains of 1.63%, followed by 1.02% in Oman; while Dubai was the worst performing index regionally with losses of 1.75%, weighed by Emirates NBD.

Going forward, global economic backdrop has moved from negative to stable, which should continue to act as a catalyst for the equity markets. However, uncertainties around the trade agreement and Brexit could restrict any upside in the near future. For the regional markets, the upcoming IPO of Saudi Aramco is likely to result in rebalancing of portfolios, which should weigh on regional equities in the coming weeks.

Indexes   Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 2,698.78 -1.75% -1.75% 6.68%
Abu Dhabi (ADSMI) 5,131.37 0.46% 0.46% 4.40%
Saudi (SASEIDX) 7,798.25 0.70% 0.70% -0.36%
Kuwait (KWSE) 4,753.69 -0.09% -0.09% 0.32%
Egypt (EGX30) 14,795.87 1.63% 1.63% 13.50%
Bahrain (BHSEIDX) 1,518.33 -0.32% -0.32% 13.54%
Oman (MSM30) 4,040.59 1.02% 1.02% -6.55%

 

 

Commodities   Value WTD (%) MTD (%) YTD (%)
Gold (s/OZ) 1458.41 -3.64% -3.62% 13.70%
Silver ($/Oz) 16.8 -7.13% -7.33% 8.50%
WTI ($/bbl) 57.24 1.85% 5.65% 26.05%
Natural Gas 2.79 2.76% 5.92% -5.14%
OPEC Oil ($/bl) 62.51 1.33% 3.79% 16.19%
Copper ($/MT) 5947 0.89% 2.81% -1.43%
Aluminium ($/MT) 1806.81 4.02% 3.66% -1.96%

                                                                   

FX Rates                Value WTD (%) MTD (%) YTD (%)
USD/AED 3.6728 0.00% 0.01% 0.00%
USD/SAR 3.7499 -0.01% -0.01% -0.03%
USD/EGP 16.1 0.06% 0.06% -9.85%
USD/EUR 0.9073 1.34% 1.20% 4.08%
USD/JPY 109.27 1.02% 1.16% -0.26%

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