Regional Equity Markets May Continue To Gradually Move Higher on The Back of Improving Economic Indicators

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CORONAVIRUS IMPACT

Global equity markets’ performance was mostly uneven during the week amid mixed signals from economic indicators. The S&P 500 advanced for the fourth consecutive week, passing pre-pandemic record levels seen in February 2020, which was the second fastest bear market recovery in the US history.

Although, the equity markets have recovered strongly from pre-pandemic levels, the economic recovery is significantly lower and in some cases it is even showing signs of softening, which indicates that the disconnect might continue to widen in the coming months. Oil prices dropped 1.0% in the week after reports suggested that the OPEC+ would need to trim output by an additional 2.31 million bpd to counter the recent oversupply, while rising cases could potentially restrict expected demand recovery.

For the MENA region, equity markets performed positively to record a strong performance with all the 7 indexes closing in green during the week. Dubai was the best performing index regionally with gains of 3.72%, followed by gains of 3.56% in Abu Dhabi, 3.36% in Bahrain and 1.97% in Egypt.

Going forward, equity markets are expected to remain subdued after reaching record levels as softening economic recovery could warrant some caution among investors. For the MENA region, equity markets might continue to gradually move higher on the back of improving economic indicators, but the softening global recovery might turn investors cautious going forward.

Investors should continue to focus on companies with strong balance sheet and those with the ability to capitalize on the current challenges by gaining market share and strengthen its industry position.

Indexes   Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 2,235.58 3.72% 9.01% -19.14%
Abu Dhabi (ADSMI) 4,542.96 3.56% 5.53% -10.50%
Saudi (SASEIDX) 7,842.84 1.80% 5.14% -6.51%
Kuwait (KWSE) 4,140.58 1.39% 1.34% -15.68%
Egypt (EGX30) 11,160.05 1.97% 5.29% -20.07%
Bahrain (BHSEIDX) 1,355.31 3.36% 5.02% -15.83%
Oman (MSM30) 3,628.90 1.79% 1.70% -8.85%
Commodities   Value WTD (%) MTD (%) YTD (%)
Gold (s/OZ) 1939.4 -0.22% -1.79% 27.84%
Silver ($/Oz) 26.69 1.06% 9.52% 49.69%
WTI ($/bbl) 42.82 1.37% 6.33% -29.87%
Natural Gas 2.35 7.80% 30.63% 7.35%
OPEC Oil ($/bl) 44.35 -1.00% 2.42% -32.80%
Copper ($/MT) 6611.15 4.59% 2.06% 6.63%
Aluminium ($/MT) 1795.87 1.51% 3.96% -1.46%
FX Rates              Value WTD (%) MTD (%) YTD (%)
USD/AED 3.673 0.00% 0.01% 0.01%
USD/SAR 3.751 0.01% 0.01% 0.00%
USD/EGP 15.93 0.00% 0.06% -0.44%
USD/EUR 0.848 0.40% -0.12% -4.92%
USD/JPY 105.82 -0.73% -0.06% -2.57%

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