GCC stock markets retreat in February: says Markaz report

Muscat: After a fabulous January where S&P GCC Index surged by nearly 7 per cent, the month of February marked a pull back where the index retreated by one per cent, according to a new report.
At market level, various Gulf Cooperation Council (GCC) market indices diverged during the month with Dubai being the leading gainer, surging by 2.7 per cent, the Kuwait Financial Centre (Markaz) said in its Monthly Markets Review.
Abu Dhabi, Bahrain and Kuwait also ended the month positively, gaining 1.8 per cent, 1.5 per cent and 0.5 per cent respectively. Oil and gas sector was the key contributor of Kuwait market performance, rising by 5.9 per cent during the month.
On the other hand, Qatar index was 5.7 per cent down for the month. Saudi Arabia’s Tadawul and Oman’s Muscat bourse registered a decline of 0.8 per cent and 0.5 per cent respectively.
Among the blue chips, Agility emerged to be the best performer in Kuwait, gaining 6.1 per cent during the month. Boubyan Bank on the other hand wiped out its gain in previous month as it declined by 5.9 per cent during February. National Bank of Kuwait on the other hand extended year-to-date (YTD) returns to 4.8 per cent and continues to benefit from the removal of restrictions on foreign ownership cap of 49 per cent on domestic banks.
Markaz report pointed out that globally, easing of US China trade concerns and the prospect of reaching a trade deal buoyed the equity performance. In the Federal Open Market Committee (FOMC) meeting, US Fed reiterated its stand to keep the interest rates on hold, which added further impetus to the rally. As a result, US S&P 500 index extended its gain for the year to 11.1 per cent.
China‘s Shanghai A-Share index surged by 13.8 per cent in February as conducive policy environment, easing concerns pertaining to trade war and improving sentiments resulted in increased inflows. Emerging markets continued the strong momentum during the month of February, retracing back by more than half from the decline in 2018.
Oil markets continued the strong rally for the second month in a row after a subdued performance in last quarter of 2018. Oil prices rose by 6.7 per cent during the month. Oil price movement remains volatile however the production cuts led by Saudi Arabia and the falling exports from Venezuela pushed the price upwards as rise in production elsewhere fell short of balancing the market. Goldman Sachs predicts Brent crude oil price to touch $70-$75 price range during the year as the market is expected to further tighten in the coming months. The year-end targets are however at $60 per barrel.