GCC Equity Flow Monitor - September 2018

In Q3 2018, GCC equity markets closed higher for a third consecutive quarter.

By Aditya Pugalia

In Q3 2018, GCC equity markets closed higher for a third consecutive quarter with the MSCI GCC Countries index adding +1.3%. On a m/m basis, the index gained +0.6% in September 2018, helped by +0.7% m/m gain on the Tadawul and +1.6% m/m rally on the Boursa Kuwait Premier Market index.

The Tadawul saw outflows for a fourth consecutive month with foreign investors selling stocks worth SAR 617mn in September 2018. However, on an aggregate basis, the Saudi Arabian equity markets has seen inflows of SAR 9.6bn in first nine months of 2018. The recent outflows could simply be a case of investors locking in some gains. The foreign ownership of stocks has dropped marginally but remains above 5.0% at the end of September 2018.

In September 2018, the DFM index saw inflows from foreign investors for the first time in eight months. Non-GCC investors bought stocks worth AED 215mn. On an aggregate basis, the market has seen outflows of AED 745mn from non-GCC investors in first nine months of 2018.

The Qatar Exchange saw inflows from foreign investors for a seventh consecutive month. They were net buyers to the tune of QAR 901mn in September 2018 as after effect of changes in foreign ownership ratios continued to linger on.

Trading volumes remained mixed across GCC equity markets. On a m/m basis the average daily value traded increased on the DFM and the ADX by 70% and 25% respectively. The value traded on the Tadawul dropped 18% m/m. On a ytd basis, the value traded increased 8.0% and 13.0% on the Tadawul and the Qatar Exchange respectively compared to 2017.