Domestic Markets to be Influenced by Broader Global Markets Developments

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CORONAVIRUS IMPACT

Global equities closed in negative territory, recording its longest weekly decline since 2019, which can be broadly attributed to fading hopes of a US COVID-19 stimulus package, heightened political volatility and fears over resurgence in new virus cases. However, tech stocks were able to outperform the broader markets during the week after witnessing downward pressure in previous weeks. Oil prices recorded a fall during the week, down 2.85% over rising concerns about demand due to slowing economic recovery and rise in new cases.

For the MENA region, the sentiments were in line with global markets as 5 out of the 7 regional indexes closed in red, while Kuwait and Bahrain were the only 2 indexes to close in green with gains of 1.36% and 1.05%, respectively. Dubai was the worst performing index regionally with losses of 2.96%, followed by losses of 1.26% in Egypt, and 1.22% in Saudi Arabia. 

Going forward, September is expected to close in negative territory and volatility might continue to remain elevated for the next two months due to the uncertainty around the US presidential election. Moreover, the resurgence in new cases and slowdown in economic activity will lead to a new phase of recovery with occasional setbacks. Hence, investors should brace themselves for the uncertainty and setbacks, if any, to focus on sectors/companies that have sound business models and the ability to deliver consistent returns by maintaining its competitive position in the market. 

In the MENA region, domestic markets will be influenced by developments in the broader global markets, but investors will also closely monitor the movement in oil prices to gauge the real impact on regional economies.

Indexes   Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 2,252.25 -2.96% 0.31% -18.54%
Abu Dhabi (ADSMI) 4,466.82 -0.97% -1.16% -12.00%
Saudi (SASEIDX) 8,236.17 -1.22% 3.72% -1.82%
Kuwait (KWSE) 4,391.30 1.36% 4.93% -10.58%
Egypt (EGX30) 10,911.44 -1.26% -4.00% -21.85%
Bahrain (BHSEIDX) 1,450.39 1.05% 5.03% -9.92%
Oman (MSM30) 3,627.00 -0.57% -3.84% -8.90%
Commodities    Value WTD (%) MTD (%) YTD (%)
Gold (s/OZ) 1860.05 -4.60% -5.57% 22.61%
Silver ($/Oz) 22.86 -14.61% -18.99% 28.21%
WTI ($/bbl) 40.31 -1.61% -5.40% -33.98%
Natural Gas 2.25 10.29% -14.45% 2.79%
OPEC Oil ($/bl) 41.92 -2.85% -7.42% -36.48%
Copper ($/MT) 6591.17 -3.65% -1.21% 6.31%
Aluminium ($/MT) 1747.45 -2.59% -2.04% -4.12%
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 15.775 0.10% -0.28% -1.41%
USD/EUR 0.86 1.79% 2.64% -3.58%
USD/JPY 105.62 1.00% -0.25% -2.75%

 

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