Equity Markets Continue Upward Trajectory on The Back of Improving Macroeconomic Environment

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CORONAVIRUS IMPACT

Global equities recorded a strong performance in the week on the back of better than expected economic data and improving trend in COVID-19 cases. Manufacturing data from the US, Europe, and China were encouraging and factory orders rose more than expected during the previous month. 

However, the slowdown in US jobs growth in July 2020 did not have materialistic impact on sentiments as investors focused on improving macroeconomic conditions. Oil prices rose by 2.54% during the week on the back of falling US stockpiles, coupled with anticipated improvement in demand from better than expected growth in manufacturing activity. 

For the MENA region, equity markets performed positively, following the sentiments in the global markets as investors resumed trading post the Eid Al-Adha holidays. In terms of performance, 4 out of the 7 regional indexes closed in green while 2 closed in red, and Oman remained closed for the week. Dubai was the best performing index regionally with gains of 2.77%, followed by 2.06% in Egypt, 1.27% in Abu Dhabi, 0.55% in Saudi Arabia; while Kuwait and Bahrain recorded losses of 0.32% and 0.13%, respectively. 

Going forward, equity markets could continue the upward trajectory on the back of improving macroeconomic environment and encouraging trend in COVID-19 cases. However, investors should remain cautious and focus on companies with the potential to gain market share and strengthen their position within its industry. 

For the MENA markets, stabilization in the non-oil private sector during July 2020 was encouraging and a continued trend in the coming months could drive the regional markets higher. Investors must remain prudent in terms of stock allocations, shifting their orientation to value stocks, especially those stocks that have the potential to emerge stronger from the pandemic.

Indexes   Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 2,107.64 2.77% 2.77% -23.77%
Abu Dhabi (ADSMI) 4,359.59 1.27% 1.27% -14.11%
Saudi (SASEIDX) 7,499.97 0.55% 0.55% -10.60%
Kuwait (KWSE) 4,072.77 -0.32% -0.32% -17.06%
Egypt (EGX30) 10,817.29 2.06% 2.06% -22.52%
Bahrain (BHSEIDX) 1,288.83 -0.13% -0.13% -19.96%
Oman (MSM30) Closed n.a. n.a. -10.38%

 

Commodities    Value WTD (%) MTD (%) YTD (%)
Gold (s/OZ) 2034.62 3.04% 3.04% 34.12%
Silver ($/Oz) 28.29 16.09% 16.09% 58.67%
WTI ($/bbl) 41.22 2.36% 2.36% -32.49%
Natural Gas 2.24 24.40% 24.40% 2.24%
OPEC Oil ($/bl) 44.4 2.54% 2.54% -32.73%
Copper ($/MT) 6440.6 -0.58% -0.58% 3.88%
Aluminium ($/MT) 1776.44 2.83% 2.83% -2.53%

 

FX Rates   Value WTD (%) MTD (%) YTD (%)
USD/AED 3.673 0.00% 0.00% 0.00%
USD/SAR 3.749 -0.04% -0.04% -0.05%
USD/EGP 15.91 -0.06% -0.06% -0.56%
USD/EUR 0.848 -0.07% -0.07% -4.88%
USD/JPY 105.91 0.03% 0.03% -2.49%

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