MENA Investors Cautious due to Heightened Risk in Geopolitical Environment

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CORONAVIRUS IMPACT

Global equity markets closed on a mixed note, taking a breather after a sharp rise in 2019. The heightened geopolitical risk in the Middle East, following the US airstrike in Iraq led to pullback in global equities and rise in oil and gold prices towards the end of the week.

However, the Chinese market recorded its fifth consecutive week of gains on the back of the stimulus provided by country’s Central Bank, reassuring investors that the government will ensure ample liquidity amid a wider slowdown. Brent crude oil prices were up 0.65%, rising for the fourth consecutive week, primarily supported by heightened risk arising from the US airstrike in Iraq.

For the regional markets, the weekly performance was relatively positive as all the 8 indexes closed in green. Oman was the best performing index regionally with gains of 3.59%, followed by 0.99% in Abu Dhabi.

Going forward, the rising geopolitical uncertainties could continue to weigh on investor sentiments and lead to volatility in the short-term. However, improving economic fundamentals and monetary policy could remain supportive for equity markets in the medium-term.

Furthermore, investors will shift focus on earnings to access their strategies and accordingly position themselves for the year. For the MENA region, investors will turn cautious due to the heightened risk in geopolitical environment and further escalations could lead to downward pressure in regional equities.

Indexes   Last WTD(%) MTD(%) YTD(%)
Dubai(DFMGI) 2,769.09 0.15% 0.15% 0.15%
AbuDhabi(ADSMI) 5,100.27 0.99% 0.48% 0.48%
Saudi(SASEIDX) 8,397.01 0.53% 0.09% 0.09%
Kuwait(KWSE) 4,910.69 0.30% 3.01% 3.63%
Egypt(EGX30) 13,899.54 0.11% -0.44% -0.44%
Bahrain(BHSEIDX) 1,612.05 0.50% 0.12% 0.12%
Oman(MSM30) 4,005.06 3.59% 0.60% 0.60%

 

Commodities   Value WTD(%) MTD(%) YTD(%)
Gold (s/OZ) 1551.4 2.71% 2.27% 2.27%
Silver ($/Oz) 18.03 1.58% 1.15% 1.15%
WTI ($/bbl) 63.05 2.15% 3.26% 3.26%
Natural Gas 2.13 -1.30% -2.70% -2.70%
OPEC Oil ($/bl) 68.6 0.65% 3.94% 3.94%
Copper ($/MT) 6163 -1.59% -0.60% -0.60%
Aluminium ($/MT) 1796.35 -0.75% -1.43% -1.43%

 

FX Rates   Value WTD (%) MTD (%) YTD (%)
USD/AED 3.6728 0.00% 0.00% 0.00%
USD/SAR 3.7517 -0.02% 0.02% 0.02%
USD/EGP 15.99 -0.06% -0.06% -0.06%
USD/EUR 0.8958 0.13% 0.46% 0.46%
USD/JPY 108.08 -1.22% -0.49% -0.49%

 

About Allied Investment Partners PJSC

Established in 2007, Allied Investment Partners PJSC is licensed by Central Bank of the UAE and Securities and Commodities Authority, and is a leading investment firm providing various services like Asset Management, Alternative Investments, Wealth Management, Securities and Custody Services, Corporate Finance and Investment Banking Advisory.

For more information, please visit http://aipuae.com/

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Krishika Mahesh: Krishika@matrixdubai.com

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