Here’s a closer look at GCC stock markets in H1; Qatar takes hit

Stock market performance across the Gulf Cooperation Council was mixed during the first half of the year, data compiled by Argaam showed.

The Qatar Stock Exchange saw the sharpest decline, down 13.5 percent. Qatari stocks were hit hard following the diplomatic rift between Doha and its neighboring Arab countries. Saudi Arabia, Bahrain, the United Arab Emirates, and Egypt cut diplomatic ties with Qatar last month, accusing it of supporting terrorism.

Muscat followed with an 11.5 percent decline, while Dubai and Abu Dhabi indexes fell by 3.6 percent and 2.5 percent, respectively.

Kuwait bucked the trend, with a 17.8 percent increase. Bahrain’s index rose 7.6 percent, while the Saudi Stock Exchange (Tadawul) rose 3 percent.

Most Gulf markets started the year off on a positive note, led by Kuwait’s benchmark index, which was up 19 percent at the time. Tadawul, on the other hand, was down 2 percent.

By the end of Q2, market indices had headed south due to several factors, including the drop in oil prices (below $50/barrel) and the slow season of Ramadan and summer months. Tadawul, however, bucked the trend, rising 6 percent after it was added to MSCI’s watch list for emerging market status just last month.

Overall, trading volumes in the Gulf fell 26 percent year-on-year (YoY) to $167.3 billion in the first half, compared to $226.7 billion in the same period last year, data compiled by Argaam showed.

Tadawul led the decline in trading volumes, with a 37 percent drop; followed by Muscat at 16 percent.

Bahrain had the highest trading volume, surging 144 percent to $293 million.

The total market value of GCC markets rose 8 percent YoY to $908.9 billion in H1.

The GCC Price-Earnings ratio (P/E) declined, with Bahrain reporting the least P/E at 8.9, while Saudi Arabia had the highest P/E of 17.2.

Meanwhile, the performances of the largest 20 companies by market value varied. Saudi companies occupied 12 places in the list, with 10 companies recording higher market value during the first half of the year. This included Saudi Basic Industries Corp. (SABIC), STC, Al Rajhi Bank, SEC, NCB, Almarai, and Maaden.

Elsewhere, Industries Qatar’s market value declined by 19 percent in H1 after being slapped with a lower credit rating.

Qatar National Bank, the largest lender in the Middle East, saw its market value drop 14 percent. Qatar’s stocks have been hit by a selling wave since the diplomatic crisis with its Gulf neighbors. 

*After the merger of First Gulf Bank (FGB) and National Bank of Abu Dhabi (NBAD)