Here’s a closer look at GCC stock markets in H1; Qatar takes hit

03/07/2017 Argaam Special

Stock market performance across the Gulf Cooperation Council was mixed during the first half of the year, data compiled by Argaam showed.

 

The Qatar Stock Exchange saw the sharpest decline, down 13.5 percent. Qatari stocks were hit hard following the diplomatic rift between Doha and its neighboring Arab countries. Saudi Arabia, Bahrain, the United Arab Emirates, and Egypt cut diplomatic ties with Qatar last month, accusing it of supporting terrorism.

 

Muscat followed with an 11.5 percent decline, while Dubai and Abu Dhabi indexes fell by 3.6 percent and 2.5 percent, respectively.

 

Kuwait bucked the trend, with a 17.8 percent increase. Bahrain’s index rose 7.6 percent, while the Saudi Stock Exchange (Tadawul) rose 3 percent.

 

Most Gulf markets started the year off on a positive note, led by Kuwait’s benchmark index, which was up 19 percent at the time. Tadawul, on the other hand, was down 2 percent.

 

By the end of Q2, market indices had headed south due to several factors, including the drop in oil prices (below $50/barrel) and the slow season of Ramadan and summer months. Tadawul, however, bucked the trend, rising 6 percent after it was added to MSCI’s watch list for emerging market status just last month.

 

Overall, trading volumes in the Gulf fell 26 percent year-on-year (YoY) to $167.3 billion in the first half, compared to $226.7 billion in the same period last year, data compiled by Argaam showed.

 

Tadawul led the decline in trading volumes, with a 37 percent drop; followed by Muscat at 16 percent.

 

Bahrain had the highest trading volume, surging 144 percent to $293 million.

 

The total market value of GCC markets rose 8 percent YoY to $908.9 billion in H1.

 

The GCC Price-Earnings ratio (P/E) declined, with Bahrain reporting the least P/E at 8.9, while Saudi Arabia had the highest P/E of 17.2.

 

Meanwhile, the performances of the largest 20 companies by market value varied. Saudi companies occupied 12 places in the list, with 10 companies recording higher market value during the first half of the year. This included Saudi Basic Industries Corp. (SABIC), STC, Al Rajhi Bank, SEC, NCB, Almarai, and Maaden.

 

Elsewhere, Industries Qatar’s market value declined by 19 percent in H1 after being slapped with a lower credit rating.

 

Qatar National Bank, the largest lender in the Middle East, saw its market value drop 14 percent. Qatar’s stocks have been hit by a selling wave since the diplomatic crisis with its Gulf neighbors. 

 

Top 20 Stocks by Market Cap (USD mln)

Company

Market

Dec. 2016

June 2017

Change

SABIC

Saudi

73174

81844

+12%

STC

Saudi

38684

41078

+6%

Etisalat

Abu Dhabi

44537

40984

(8%)

QNB

Qatar

36932

31672

( 14%)

First Abu Dhabi Bank

Abu Dhabi

14303

31169*

+118%

Al Rajhi Bank

Saudi

27332

30217

+11%

SEC

Saudi

25071

28326

+13%

NCB

Saudi

22725

28318

+25%

Almarai

Saudi

14608

20571

+41%

Jabal Omar

Saudi

18519

18234

( 2%)

Industries Qatar

Qatar

19194

15600

( 19%)

Maaden

Saudi

12146

15249

+26%

NBK

Kuwait

13554

15196

+12%

Emaar

Dubai

13906

15173

+9%

Samba

Saudi

12983

13805

+6%

Emirates NBD

Dubai

12853

12323

(4%)

SABB

Saudi

9998

10725

+7%

KFH

Kuwait

9337

10304

+10%

BSF

Saudi

8363

9936

+19%

ADCB

Abu Dhabi

10517

9926

(6%)

*After the merger of First Gulf Bank (FGB) and National Bank of Abu Dhabi (NBAD)

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