In September 2017, GCC equity markets declined

In September 2017, GCC equity markets declined with the MSCI GCC Countries index losing -0.8%. This was despite a +9.9% rally in Brent oil prices during the month. The decline was led by the DFM index (-2.0%) and the Qatar Exchange (-5.6%). The Tadawul (+0.3%) and the Kuwait 15 index (+1.3%) managed to hold onto their gains of the previous month.

For a second consecutive month, the DFM saw inflows from non-GCC investors. They were net buyers to the tune of AED 40.3mn. GCC investors were net sellers to the tune of AED 34.3mn.

The Qatar Exchange continued to see outflows from foreign investors for a fifth consecutive month. Outflows accelerated further as hopes of a quick reconciliation faded away. Foreign investors sold stocks worth QAR 310.8mn in September 2017 to take the total outflows to QAR 1.95bn since June 2017.

The Tadawul saw outflows from foreign investors of SAR 5.3bn in September 2017. But that was mainly on account of a single strategic outflow of SAR 5.77bn. If that transaction is excluded then there was a net inflow of c.SAR 450mn from foreign investors. This was mainly on account of the news of a potential upgrade into the FTSE EM index during the month. However, the index provider decided to delay the inclusion further in a decision which was announced after the last trading day of September 2017.

With the exception of the DFM, volumes increased on a m/m basis in September 2017. The value traded on the Tadawul and the Qatar Exchange grew +8.0% m/m and +38.0% m/m respectively. However on y/y basis, volumes declined the most on the Tadawul with average daily value traded dropping -29.0% y/y in the first nine months of 2017.

Average Daily Value Traded (USDmn)

Source: Emirates NBD Research

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