Markaz: GCC markets continue their gains on oil price rise


Kuwait Financial Centre “Markaz” recently released its Monthly Market Review report for the month of June 2021. Markaz report noted that Kuwait equity markets had another great month. Kuwait All Share index extended its good run and gained 2.8% for the month and now enjoys a gain of 15.2% for the year. Market liquidity in June, as indicated by the average daily traded value, stood at USD 215million, a decrease of 11% compared to the earlier month.

Among Kuwait sectors, Technology was the top gainer, rising 31.7% followed by Insurance at 11%, while Utilities and Basic Materials declined by 5% and 0.8% respectively for the month. Among blue chips, Boubyan Bank was the top gainer rising 9.1% in June, extending its gains from the previous months. The stock has gained 35% for the year as investors expect it to report strong earnings in 2021 underpinned by its technology driven banking solutions. NBK, Kuwait’s largest bank by assets, was the second biggest gainer, rising 2.3% for the month and has made close to 10% gains this year.

Regionally, S&P GCC index gained for the eighth consecutive month as oil price continued to rise with Brent crude staying above USD 70/barrel throughout the month. S&P GCC composite index ended the month 3.1% higher. Most of the GCC markets made gains during the month. KSA, Bahrain and Oman gained 4.1%, 4.0% and 5.5%, respectively. Abu Dhabi and Dubai gained 4.2% and 0.5% respectively for the month while Qatar was down 0.2%.

Among the GCC blue chip companies, the best performer was UAE’s International Holdings Company which gained 25.3% during the month and 183% for the year to become the largest company by market capitalization (USD 59 billion) in the UAE. The Company has investments in a variety of businesses ranging from Elon Musk’s SpaceX Inc. to a local fishery company. The stock was further boosted by the listing of Alpha Dhabi Holding, a real estate company in which it holds a 45% stake.

The performance of global equity markets was positive, with the MSCI World Index closing 1.4% higher in June after the US Federal Reserve indicated that it would not be raising interest rates until 2023 and several European countries reopened their economies after falling COVID-19 cases. U.S. market (S&P 500) made a gain of 2.2% for the month while long term treasury yields fell after inflation numbers came lower than expected and the Federal Reserve removed restrictions on dividend distribution for U.S banks. U.K’s FTSE 100 rose by 0.2% for the month after it announced that it was postponing the reopening of its economy by four weeks.

Oil prices closed at USD 75 per barrel at the end of June, posting a monthly gain of 7.6%. Oil reached its highest level since 2018 on sustained demand indicated by declining stockpiles and dimming prospect of any immediate spike in oil supply from Iran as talks with the U.S on a nuclear deal faltered.