Most Mena markets remained sluggish in April: Markaz

Traders work at the Egyptian stock exchange in Cairo, Egypt April 18, 2016. REUTERS/Mohamed Abd El Ghany

Traders work at the Egyptian stock exchange in Cairo, Egypt April 18, 2016. REUTERS/Mohamed Abd El Ghany

REUTERS/Mohamed Abd El Ghany

04 May 2017

Most of the Middle East and North Africa (Mena) region bourses closed in the negative territory for the month of April barring Morocco, Abu Dhabi and Saudi Arabia that gained 2.3 percent, 1.8 percent and 0.2 percent, respectively.

Jordan, Qatar and Egypt declined by 3.5 percent, 3.1 percent and 3 percent, respectively while Kuwait price index fell by 2.1 percent. Mena markets remained sluggish in April due to drop in trading liquidity and poor investments from both domestic and international investors.

According to the latest Monthly Market Research report released yesterday by Kuwait Financial Centre ‘Markaz’, Mena markets tumble in April in line with Oil prices.

In the report, Markaz examined and analysed the performance of equity markets in the Mena region as well as the global equity markets for the month of April 2017.

First quarter earnings of companies in Dubai, Egypt and other markets fell short of expectations pulling down the share prices as well. Egypt index fell as local investors withdrew their positions in many blue chips. Saudi Arabian index gained marginally by 0.2 percent , the uptick driven by the petrochemical companies.

Value traded and volumes in March reflected a mixed market mood, with volume traded, dropping by 22 percent  while the turnover in the market increased by 34.6 percent . All Mena markets, barring Saudi Arabia and Dubai, witnessed increase in turnover in March.

Dubai and Abu Dhabi witnessed the maximum fall in liquidity with volume declining by 41 percent  and 40 percent,  respectively. In terms of valuation, P/E of Morocco (19.18x), Kuwait (16.2x), and Qatar (15.06x) markets were at premium, while the markets of Dubai (9.39x), Egypt (9.4x), and Bahrain (10.06x) were the discount markets in the Mena region.

Many blue chips were in the red in April, while few companies such as National Bank of Abu Dhabi (NBAD) gained. The post-merger listing of NBAD and investors focus on specific stocks in the real estate and banking sector pushed the share prices of NBAD up by 7.8 percent.

Mashraf Al Rayan’s stocks increased by 5.1 percent  following positive earnings growth reported in Q1 2017 and increasing revenue from core operations. SABIC’s stocks gained 2.1 percent  last month, as analyst expectations on the petrochemical sector remained positive.

Petrochemical companies are expected to benefit from the higher prices of end products resulting in better earnings compared to the previous quarters.

© The Peninsula 2017


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