Equity Markets to Witness Increased Volatility due to Uncertainty over Economic Recovery, US Election

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CORONAVIRUS IMPACT

Global equity markets closed higher during the week amid hopes of another relief stimulus deal from the Congress. The markets clearly ignored the uncertainties around the economic recovery and resurgence in new COVID-19 cases in certain parts of the world. In September, the equity markets performed negatively, especially the technology sector stocks, which dragged the NASDAQ index lower by 5.72% during the month. Oil prices closed lower by 6.32% during the week, primarily impacted by news of US President Trump testing positive for COVID-19 and concerns over rising cases across the world. 

For the MENA region, the markets performed positively during the week as 4 out of the 7 regional indexes closed in green. Egypt was the best performing index regionally with gainsMarketsof 1.28% in Egypt, followed by gains of 0.71% in Saudi Arabia, 0.60% in Dubai, and 0.56% in Abu Dhabi. On the other hand, Kuwait, Bahrain, and Oman closed lower by 2.00%, 1.24%, and 0.34%, respectively, during the week. The performance of MENA equities was broadly positive in September as 4 out of the 7 indexes closed in green, while 2 ended in red and 1 remained flat during the month. 

Going forward, equity markets are expected to witness increased volatility due to uncertainty over economic recovery and the upcoming US election. For the MENA region, developments in oil price amid an uncertain demand outlook will continue to weigh on investor sentiments over the next couple of weeks. Investors will also closely monitor the third quarter earnings to assess the pace of economic recovery and outlook going forward.

Indexes   Last WTD (%) MTD (%) YTD (%)
Dubai (DFMGI) 2,265.70 0.60% -0.34% -18.05%
Abu Dhabi (ADSMI) 4,492.02 0.56% -0.58% -11.50%
Saudi (SASEIDX) 8,295.05 0.71% -0.05% -1.12%
Kuwait (KWSE) 4,303.51 -2.00% n.a. -12.36%
Egypt (EGX30) 11,051.30 1.28% 0.56% -20.84%
Bahrain (BHSEIDX) 1,432.46 -1.24% -0.14% -11.04%
Oman (MSM30) 3,614.64 -0.34% n.a. -9.21%
Commodities    Value WTD (%) MTD (%) YTD (%)
Gold (s/OZ) 1898.7 2.08% 0.70% 25.16%
Silver ($/Oz) 23.7 3.67% 2.11% 32.92%
WTI ($/bbl) 38.72 -3.94% -3.73% -36.59%
Natural Gas 2.53 12.44% 0.00% 15.58%
OPEC Oil ($/bl) 39.27 -6.32% -7.16% -40.50%
Copper ($/MT) 6310.52 -4.26% -4.14% 1.78%
Aluminium ($/MT) 1731.11 -0.94% -2.09% -5.01%

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