Regional Traders Look To Oil Prices; Coronavirus Containment

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Global equity markets observed positive sentiments as investors seem to be encouraged by aggressive monetary policy actions by Central Banks, especially the USD 2 trillion stimulus package by the US Fed. Investors appear to be brushing off the dismal unemployment data from the US during the week, as the markets are expected to receive further stimulus packages to boost economic activity. 

The global equity markets are expected to close March on a negative note, primarily due to a sharp sell-off recorded during the first two weeks of the month. Brent crude prices were down 7.60% during the week, extending the YTD losses to 62.23%. 

For the region, equity markets recorded a mixed performance as hopes of government stimulus to boost economic activity was offset by lockdowns to minimise the spread of the coronavirus. During the week, 4 out of the 7 regional indexes closed in green, while 3 closed in red. Egypt was the best performing index regionally with gains of 7.68%, followed by 2.74% in Kuwait, and 2.31% in Abu Dhabi. On the other hand, Bahrain was the worst performing index regionally with losses of 1.41%. 

Given that the situation is still uncertain with the rapid spreading of the coronavirus in the US and Europe, it remains impossible to quantify the contraction in global economies. Hence, it might be prudent for investors to remain cautious and follow a disciplined approach of investing in equity markets. Investors should also take this as an opportunity to diversify portfolios by changing sectors and asset allocations. 

For the regional markets, the trading activity will be largely attributed to movement in oil prices and ability of the governments to contain the spread of the virus. Furthermore, proactive stimulus packages will be supportive of equity markets and calm investor anxiety.

Indexes   Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 1,809.12 -0.56% -30.15% -34.57%
Abu Dhabi (ADSMI) 3,770.73 2.31% -23.07% -25.71%
Saudi (SASEIDX) 6,326.92 0.95% -17.06% -24.58%
Kuwait (KWSE) 4,142.38 2.74% -13.15% -15.65%
Egypt (EGX30) 9,912.98 7.68% -23.80% -29.00%
Bahrain (BHSEIDX) 1,388.78 -1.41% -16.36% -13.75%
Oman (MSM30) 3,538.74 -0.80% -14.34% -11.11%

 

Commodities    Value WTD (%) MTD (%) YTD (%)
Gold (s/OZ) 1617.5 8.00% 2.07% 6.62%
Silver ($/Oz) 14.47 15.02% -13.15% -18.84%
WTI ($/bbl) 21.51 -4.10% -51.94% -64.77%
Natural Gas 1.63 1.87% -2.97% -25.35%
OPEC Oil ($/bl) 24.93 -7.60% -50.65% -62.23%
Copper ($/MT) 4853.51 0.97% -5.25% 6.16%
Aluminium ($/MT) 1551.41 -4.10% -4.06% 12.84%

 

FX Rates   Value WTD (%) MTD (%) YTD (%)
USD/AED 3.6727 0.00% 0.00% 0.00%
USD/SAR 3.755 -0.07% 0.10% 0.11%
USD/EGP 15.69 -0.06% 0.61% -1.94%
USD/EUR 0.8973 -4.02% -1.05% 0.63%
USD/JPY 107.89 -2.63% -0.17% -0.66%

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