Regional Trading to Depend on Oil Prices Developments

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CORONAVIRUS IMPACT

Global equity markets recorded their second consecutive week of gains as investors seem to be encouraged with the progress made towards containing the coronavirus. Moreover, the US and European countries are moving towards relaxing restrictions and resuming economic functioning, which also helped improve investor sentiments during the week. 

Having said that, investors are ignoring the important economic indicators, which are in most cases worse than estimates. Brent crude oil continued to remain under pressure with a drop of 10.80% during the week as investors believe that the productions cuts might not be enough to offset the sharp decline in demand, and a supply overhang will continue to persist in the near future. 

For the region, the performance during the week was mixed as investors preferred to sell equities in countries with higher reliance on oil, while focusing on countries that are likely to benefit from global optimism. For the week, 4 out of the 7 regional indexes closed in green while 3 closed in red. Oman was the best performing index regionally with gains of 1.93%, followed by 1.63% in Dubai, and 0.97% in Bahrain.  Saudi Arabia was the worst performing regionally with losses of 5.35%, followed by 3.50% in Abu Dhabi. 

Going forward, investors should closely monitor the economic data and track related developments as countries are likely to remove restrictions both gradually and unevenly. Furthermore, continued government intervention will also playout within the equity markets, especially the ability of policymakers in reducing bankruptcies and job losses. For the region, the trading activity will continue to largely depend on the development in oil prices, which will also prompt investors to accordingly rebalance their portfolios.

Indexes   Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 1,859.79 1.63% 5.00% -32.73%
Abu Dhabi (ADSMI) 3,969.51 -3.50% 6.29% -21.79%
Saudi (SASEIDX) 6,631.69 -5.35% 1.94% -20.95%
Kuwait (KWSE) 4,011.54 0.81% -1.75% -18.31%
Egypt (EGX30) 10,154.64 -1.62% 5.84% -27.27%
Bahrain (BHSEIDX) 1,312.98 0.97% -2.79% -18.46%
Oman (MSM30) 3,539.54 1.93% 2.65% -11.09%

 

Commodities    Value WTD (%) MTD (%) YTD (%)
Gold (s/OZ) 1684.19 0.02% 7.20% 11.02%
Silver ($/Oz) 15.13 -2.07% 8.30% -15.14%
WTI ($/bbl) 18.27 -19.73% -10.79% -70.08%
Natural Gas 1.75 1.15% 6.89% -19.92%
OPEC Oil ($/bl) 28.08 -10.80% 23.48% -57.45%
Copper ($/MT) 5224.16 3.70% 8.20% -15.74%
Aluminium ($/MT) 1531.76 3.65% 0.04% -15.95%

 

FX Rates   Value WTD (%) MTD (%) YTD (%)
USD/AED 3.6728 0.00% 0.00% 0.00%
USD/SAR 3.755 -0.13% -0.21% 0.11%
USD/EGP 15.7 -0.44% 0.06% -1.88%
USD/EUR 0.9195 0.51% 1.45% 3.12%
USD/JPY 107.51 -0.88% -0.02% -1.01%

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