The GCC equity market index closed 2023 with one of the smallest annual gains at 714.69 points, registering a rise of 3.7% after recording mixed performance at the country level. This pales in comparison to double-digit gains for most major global equity markets.
Out of the seven exchanges, four recorded gains while three closed in the red, said Kamco Invest, a regional non-banking financial powerhouse.
Dubai was the best performing market in the region with a gain of 21.7% followed by Saudi Arabia, also with a double-digit gain of 14.2%. Bahrain and Qatari indices also closed in the green, although with much smaller gains of 4.0% and 1.4%. On the other hand, Oman was the biggest decliner in the region with a fall of 7.1% followed by 6.5% decline in the Kuwait All Share index and 6.2% decline in ADX.
Strong IPO pipeline
The performance in the GCC also highlighted the importance of a strong pipeline of IPOs that are critical for attracting international capital flows and generating resilient market performance.
Both Saudi Arabia and Dubai exchanges saw IPOs of some of the key companies in the region garnering strong investor demand. The markets, especially Saudi Arabia, were also insulated from the decline in crude oil prices that is still essential for economic growth in the region.
The MSCI GCC Index was up by 3.7% during the year after reporting a relatively smaller decline during 2022. The trend in the index showed volatile performance during the year.
Geopolitical tensions
The index declined to a 2.5 year low during October-2023 led by geopolitical tensions related to the war on Gaza and its impact on the region as well as subdued oil prices since the start of the year due to demand growth concerns, especially related to the recovery in China.
However, due to the minimal impact from the war, the region witnessed swift recovery, in line with the recovery seen in other key global equity markets. The MSCI GCC index recovered almost 15% since the end of October-2023. One of the most notable trend during the 2H-2023 was the stark disconnect between crude oil prices and the GCC index as both the asset classes moved in opposite direction.
The performance of individual markets in the GCC were mixed in 2023. Dubai was the best performing market in the region with a strong double-digit gain of 21.7% followed by Saudi Arabia also with a healthy gain of 14.2%.
Gains in Dubai
Gains in Dubai were led by almost 50% gain in the Consumer Discretionary index and 38.4% gain in the heavyweight Real Estate Index that were partially offset by decline in Consumer Staples, Communications and Materials indices while in Saudi Arabia, the gains were led by a broad-based positive performance across sectors.
Bahrain and Qatari indices also reported positive gains of 4.0% and 1.4%, respectively. On the other hand, Oman reported the biggest decline in the GCC during the year with the MSX 30 index recording a slide of 7.1%. Kuwait was next with the All Share index sliding by 6.5% closely followed by last two year’s best performer Abu Dhabi with a decline of 6.2%.
The GCC sector performance chart showed gains across the board with all sectors in the green. The Pharma (+75.8%), Insurance (+57.9%) and Healthcare (+37.7%) indices topped yearly performance while heavyweight sectors like Banks and Energy showed relatively smaller gains of 6.1% and 20.0%, respectively.--TradeArabia News Service
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