Intense corporate week ahead for GCC amid global inflation concerns

Strong July net foreign inflows for GCC
Intense corporate week ahead for GCC amid global inflation concerns

An intense week left the GCC equity markets with a mix of gains and losses. UAE markets Dubai (+1.1 percent) and Abu Dhabi (+0.3 percent) advanced, aided by strong corporate results and high crude oil prices, with Dubai reaching its highest level since late 2015, according to Iridium Advisors.

Oman’s modest (+0.1 percent) rise marked its eighth gain in nine weeks. Bahrain (-0.5 percent) partly reversed its past week’s gain. Qatar retracted nearly 1% due to selling pressure from all except foreign institutions. Kuwait (-1.6 percent) was in the loss column for a second straight week. Saudi Arabia recorded a decline of 4 percent.

In the US, the Dow Jones (-1.1 percent), S&P 500 (-2.3 percent), and Nasdaq Composite (-2.8 percent) reversed their gains owing to several factors — downgrade of the US credit rating by Fitch, less-than-expected rise in US employment, and the PMI showing weakness in the manufacturing and services activities. European markets also reversed their trend, with the DAX (-3.1 percent) falling the most, followed by STOXX600 (-2.4 percent), CAC40 (-2.2 percent), and FTSE100 (-1.7 percent).

The Week Ahead

The GCC stands poised for another hectic week filled with corporate announcements. Companies such as ADA, ALAFCO, Alba, Al Salam Bank, AQARAT, Aramex, ARIG, Baladna, BAYANAT, BDFS, Cineco, DEWA, EIB, GFH, IQCD, Inovest, Jazeera Airways, Milaha, NBB, QAMCO, QEWC, Salik, Saudi Aramco, SHUAA, UGIC, and Yahsat, are gearing up to release their 2Q23 results.

Read: Strong Q2 2023 earnings and crude oil optimism propel leading GCC equity markets

Alongside, Al Ansari, Dlala, Jamjoom Pharma, National Finance, solutions by STC, SPIMACO and Takaful Oman, among others, will host their 2Q 2023 earnings calls. In other corporate movements, Mouwasat seeks a nod for a share capital increase via a bonus issue, while GAS and Fitaihi Holding shareholders will deliberate on a potential stock split. All eyes will also be on the MSCI Quarterly Index Review results.

Global markets – inflation and GDP in the limelight

In the US, investors will focus on inflation reports. The industry expects inflation to rise around 3%. Initial jobless claims and trade data will also be important data points released during the week. In the EU, the Sentix Eurozone sentiment data is expected to show that confidence is low in August, dwindling 50bps from -22.5 to -25. In the UK, investors will keep an eye on GDP data; the street expects second-quarter GDP to be flat. Market pundits expect the BoE to introduce further rate hikes.

GCC net foreign flows rise again in July 2023

For July 2023, the GCC reported back-to-back months of net foreign inflows, touching $1.7 billion. The combined inflow for June and July stands at approximately $2.9 billion. Saudi Arabia doubled its foreign inflows in July, tallying $1.05 billion, hence accounting for nearly 63 percent of the GCC’s total. This marks a ten-month streak of net investments in Saudi by foreign investors. The UAE’s inflow for July was $470 million, with Abu Dhabi contributing $304 million. Qatar saw its peak in net foreign inflows over the past four months, amounting to $184 million. However, Oman reported a minor outflow of $2.7 million, and Kuwait had net outflows of around $20 million.

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