Investors Should Be Cautious Due to Rising Global Markets Uncertainty

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CORONAVIRUS IMPACT

Global equities performed negatively during the week on the back of weak economic data, worries of a second pandemic wave and the timid recovery post-lockdown. Additionally, the mounting tensions of a resumption in the US and China trade war further dampened the sentiments during the week. 

Quarterly earnings of corporates also indicate further contraction in the second and third quarter on the back of a prolonged recession caused by the COVID-19 pandemic. Oil prices observed another positive week of gains of 18.96% amid a gradual uptick in global demand over the phased reopening of economies. 

For the region, the trading activity was broadly mixed during the week, as optimism over the reopening of economies was negatively offset by OPEC’s downward revision to its global oil demand forecast for 2020. During the week, 5 out of the 8 regional indexes closed in red, while 3 closed in green. Bahrain was the worst performing index regionally with losses of 3.05%, followed by 1.86% in Kuwait, 1.79% in Oman, and 1.46% in Dubai. Saudi Arabia was the best performer with gains of 1.33%, followed by 1.09% in Egypt, and 0.13% in Abu Dhabi

Going forward, investors should continue to remain cautious due to the rising uncertainty of the global outlook and worries of a second wave of COVID-19 cases. Central Banks are also indicating that additional stimulus will be necessary to minimize the long-term impact on global economies. 

For the regional markets, trading activity during the coming two weeks is likely to be subdued due to the upcoming Eid holidays. Moreover, the rising uncertainty within the global markets will refrain investors from taking any new positions during this period, especially with the long Eid break that will be observed across the region.

Indexes   Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 1,894.47 -1.46% -6.52% -31.48%
Abu Dhabi (ADSMI) 4,067.03 0.13% -3.86% -19.87%
Saudi (SASEIDX) 6,716.98 1.33% -5.57% -19.93%
Kuwait (KWSE) 4,060.89 -1.86% -3.92% -17.31%
Egypt (EGX30) 10,287.21 1.09% -2.53% -26.32%
Bahrain (BHSEIDX) 1,240.65 -3.05% -5.35% -22.95%
Oman (MSM30) 3,421.67 -1.79% -3.33% -14.05%

 

Commodities    Value WTD (%) MTD (%) YTD (%)
Gold (s/OZ) 1741 2.37% 3.63% 14.77%
Silver ($/Oz) 16.62 7.57% 10.65% -6.79%
WTI ($/bbl) 29.43 18.96% 56.21% -51.80%
Natural Gas 1.65 -9.71% -15.55% -24.81%
OPEC Oil ($/bl) 32.5 4.94% 28.61% -50.76%
Copper ($/MT) 5246.27 0.01% -0.83% -15.38%
Aluminium ($/MT) 1481.5 -0.05% -1.73% -18.71%

 

FX Rates   Value WTD (%) MTD (%) YTD (%)
USD/AED 3.6727 0.00% 0.00% 0.00%
USD/SAR 3.756 0.03% 0.01% 0.14%
USD/EGP 15.69 -0.06% -0.06% -1.94%
USD/EUR 0.9245 0.23% 1.32% 3.68%
USD/JPY 107.02 0.35% -0.14% -1.46%

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