Markaz: Accelerated vaccination measures and upbeat earnings fuels market euphoria


Kuwait Financial Centre “Markaz” recently released its Monthly Markets Review report for the month of April 2021. Markaz report noted that Kuwait equity markets continued to rally following upbeat earnings reported by corporates for the quarter ending March 31, 2021. Kuwait All Share index extended its good run and gained 5.8% for the month. Market liquidity in April, as indicated by the average daily traded value, stood at USD 171million, an increase of 25% compared to the earlier month.

Among Kuwait sectors, Technology was the top gainer, rising 30.5% followed by industrials at 15.6%, while utilities declined by 4.9% for the month. Among blue chips, Agility Public Warehousing leapt 30.6% for the month. DSV Panalpina, Demark-based company has agreed to buy the logistics division of Agility Warehousing in an all share deal worth USD 4.1 billion, to create the world’s third largest freight forwarding firm. The deal is one among several in recent times, as global logistics firms are trying to build scale in a fragmented industry. Boubyan Bank surged 13.7% for the month as the bank continued to improve its domestic market share driven by its fintech-oriented retail offering that proved advantageous in customer acquisition, retention and deposit mobilization during COVID-19 time. Boubyan bank reported net income for the quarter ending March, 2021 was higher by 19.5% (YoY).

Regionally, S&P GCC index marched ahead for the sixth consecutive month in-line with the gains made by oil since November last year. S&P GCC composite index ended the month 4.4% higher. Qatar gained 4.9% for the month, led by banking stocks, following the lifting of foreign ownership cap on listed companies. KSA and Abu Dhabi added 5.2% and 2.3%, for the month. Dubai increased 2.2%, while Bahrain and Oman gained 1.8% and 1.4%, respectively.

Among the GCC blue chip companies, International Holdings Company continued its stellar rally, gaining 42.6% for the month and in the process surpassing the market cap of UAE leading lender – First Abu Dhabi Bank. The firm has been aggressively sourcing deals and its investments range from Elon Musk’s SpaceX to local fishery firm. Industries Qatar gained 12.8% following record earnings for the quarter. The firm earnings in Q1 2021 rose, 478% compared to Q1 2020 and 43% compared to Q4 2020, to QAR 1.5billion, its highest quarterly profit since 2016 on the back of improved price realization for its products.

The performance of global equity markets was positive, with the MSCI World Index closing 4.5% higher in April as a powerful economic restart is underway amid accelerated vaccination and continued support from major central banks. U.S. market (S&P 500) gained 5.2% for the month while treasury yields softened following strong earnings. 87% of the firms that have reported Q1 results, so far, have beat expectations. U.K (FTSE 100) rose by 3.8% for the month.

Oil prices closed at USD 67.25 per barrel at the end of April 2021, posting a monthly gain of 5.8%. Oil prices have remained range bound between USD 60-70/bbl in the past three months as the OPEC+ maintained compliance with production cuts while demand uncertainty continues to persist amid rising COVID-19 cases in the Asian countries.