GCC market dynamics underpinned by $80 crude oil

But also monetary policy and packed earnings calendar
GCC market dynamics underpinned by $80 crude oil
GCC markets

It was a mostly positive performance for the GCC market last week, according to investor relations consulting firm Iridium Advisors.

Qatar gained (+2.2 percent), driven by a strong banking sector. Saudi Arabia (+0.4 percent) edged higher, partly driven by gains in banks. Oman (+0.2 percent) continued its bullish streak for a 7th consecutive week. Kuwait (+0.1 percent) and Bahrain (+0.1 percent) clocked identical gains, amid an increase in crude oil prices. Meanwhile, Abu Dhabi (-0.4 percent) registered a minor loss due to weakness in the heavyweight FAB and Dubai (-0.6 percent) slipped triggered by profit-taking.

In the US, the Dow Jones (+2.1 percent), and S&P 500 (+0.7 percent) prolonged their gains on positive earnings reactions from some large-cap companies, coupled with optimism around an imminent end to the US Fed’s rate-hike cycle, based on recent inflation data. However, the Nasdaq Composite (-0.6 percent) felt the sting of Tesla and Netflix’s disappointing earnings. European markets, meanwhile, strengthened further with the FTSE100 climbing 3.1 percent, followed by STOXX600 (+1.0 percent), CAC40 (+0.8 percent), and DAX (+0.4 percent).

Read: GCC markets: Riding the global recovery wave as investors await earnings

The Week Ahead Regional markets – Oil surge to bolster confidence

The rising tide of Brent crude, which recently broke the $80 per barrel barrier, is likely to instill positivity in regional markets in the coming week. Additionally, market watchers will be keeping an eagle eye on the forthcoming US Federal Reserve meeting. On the corporate agenda, this week, Aamal, Ascana, ADIB, Aayan Leasing, Beyon, DIB, Doha Bank, Du, Mashreq Bank, Multiply Group, NMDC, NBF, QIIB, UAB, UP, and others are set to announce their 2Q 2023 earnings results. Moreover, Aamal, Alinma, Barwa Real Estate, DIB, National Gas, Oman Cables, Vodafone Qatar and QIIB are slated to host their 2Q 2023 earnings calls.

Global markets – Spotlight on monetary policy

Globally, attention turns to monetary policy with US investors anxiously awaiting decisions on interest rates and the release of key economic data. Upcoming PMI data and the release of Q2 GDP figures will serve as a barometer of the health of the economy, with market expectations pointing to a deceleration in growth due to tepid consumer spending. The Federal Reserve is also anticipated to announce another rate hike, nudging the total rate towards the 5.25%- 5.50% range. Over in the EU, markets are bracing for a 25bps rate hike alongside other economic indicators, including PMI data from member nations. In contrast, the UK foresees a less eventful week, with PMI data being the sole significant release.

Dubai leads regional FDI

Emirates NBD’s research has highlighted the UAE’s leading position in FDI inflows and outflows within the GCC region in 2022, marking a 10 percent YoY rise to $22.73 billion and $24.83 billion, respectively. Dubai was at the forefront, pulling in $12.8 billion of the UAE’s total FDI inflows. Saudi Arabia, despite a 35% YoY decline, secured second place with $7.89 billion. Following were Oman with $3.72 billion (-8% YoY), Bahrain ($1.95 billion; +10 percent YoY), Kuwait ($756 million; +34 percent YoY), and finally, Qatar, witnessing a 107 percent YoY plunge to $76 million.

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