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Published Date: 19 November 2019
In October 2019, GCC equity markets closed lower for a third consecutive month. The MSCI GCC Countries index dropped -2.7%. The losses were driven by Tadawul (-4.3%) and the DFM index (-1.23%). It is interesting to note that oil prices have also come under pressure over the last three months with Brent oil dropping -7.6% over the period.
The weakness in equity prices had no impact on foreign inflows. In fact, Saudi Arabian equities have now seen 11 consecutive month of inflows and on an aggregate basis has received the most funds compared to its regional peers.
The Tadawul received SAR 4.45bn in October 2019 to take their aggregate year to date inflows to SAR 84.2bn. The foreign ownership of Saudi equities crossed 9% for the first time since we started tracking the data. Interestingly, Saudi institutional investors continue to pare their positions. On an aggregate basis, they have sold stocks worth SAR 40.7bn in first ten months of 2019.
Source: Emirates NBD Research, Bloomberg
The DFM index saw inflows from foreign investors for a second consecutive month. Non-GCC investors were net buyers to the tune of AED 332mn in October 2019.
The Qatar Exchange saw outflows from foreign investors for only the second time since February 2018. Foreign investors were net sellers to the tune of QAR 30.7mn in October 2019.
Despite increased inflows, trading volume remained rather subdued. In the first ten months of 2019, the average daily value traded has dropped 3% and 8% on the Tadawul and the DFM index relative to 2018. On a m/m basis, the Tadawul and the DFM saw a decline of 12% and 18% respectively in October 2019.
GCC Equity Flow Monitor - May 2020