A report by Iridium Advisors said that In GCC markets, Dubai (+2.1%) stood as the top gainer, partly driven by real estate, banking, and utility sector stocks, with DEWA posting above-expected FY’22 results. Oman (+1.0%) and Abu Dhabi (+1.0%) clocked identical gains, with Abu Dhabi being helped partially by Aldar, which climbed after launching a boutique residential development project. Bahrain (+0.8%) recovered its previous week’s loss, whereas Kuwait (+0.1%) edged up for a fifth consecutive week.
Saudi Arabia (-2.7%) was one of two GCC markets in negative territory, dragged down primarily by financials, energy, and materials sector stocks. Qatar (-2.6%) settled around a two-year low amid weak natural gas prices.
US markets ended lower, mainly owing to interest rate concerns following hawkish comments from some US Fed officials, profit booking, and in reaction to certain earnings reports. The Nasdaq Composite (-2.4%) was the top loser, followed by S&P 500 (-1.1%) and Dow Jones (-0.2%). European markets also witnessed weakness. FTSE100 (-0.2%), STOXX600 (-0.6%), DAX (-1.1%), and CAC40 (-1.4%) all partly reversed their previous week’s gain.
The Week Ahead for regional markets
A solid recovery by crude oil prices on the back of recovery hopes in China and a 5% production cut announcement by Russia in March is likely to cheer up the regional markets, though persisting interest rate concerns could moderate the optimism. Meanwhile, earnings releases and calls will continue to guide market direction. This week, SALAMA, Deyaar, du, SHUAA, Alliance Insurance, United Foods, TAQA, Fertiglobe, ADNIC, RAKBANK, Gulf Cement, Abu Dhabi Ports, Julphar, Boursa Kuwait, Bank ABC, BDFS, BNH, CIneco, QGTS, Ooredoo, GISS, BRES, among others are expected to host BoD meetings and publish 4Q 2022 financial results. In addition, AUB will seek shareholders’ approval to convert the bank from a Bahraini public shareholding to a closed Bahraini shareholding company and subsequently delist it.
The Week Ahead for Global markets
In the US, investors will keenly wait for January inflation numbers which are expected to rise 0.5% compared to the previous month. The core CPI number on a YoY basis is expected to improve from 5.7% to 5.4%. The market will also watch out for Fed language after January’s inflation report. In the EU, GDP and employment numbers will catch the attention of investors during the week. Central bank President Lagarde will speak, which will also be a standout event. In the UK, an important event will be the release of retail sales, labor market, and, most importantly, inflation data. Last month the data fell more than the BoE expected.
ESG
ESG principles have been gaining popularity in the investment world, with 89% of global investors being adopters. In the GCC region, adoption has been slower, but that is expected to change rapidly with the UAE hosting COP28 in November and the introduction of unified ESG disclosure metrics by the GCC Exchanges Committee. The EU and US are also finalizing legislation to expand sustainability disclosure requirements for companies worldwide, which means that few companies will escape their reach.
