GCC stock markets bounce back

26 August 2015

Gulf equity markets begin recovery from week of losses

  • GCC equity market show signs of recovery after major losses
  • Saudi Arabia’s Tadawul rebounds by 7.4 per cent
  • Chinese stocks continue to fall but stock markets stabilise globally

Stock markets across the GCC showed signs of recovery on 25 August from the significant losses caused by falling oil prices and recent turmoil on global stock markets.

On the Saudi Stock Exchange (Tadawul), the Tadawul All Shares Index (Tasi) surged 7.4 per cent on 25 August.

The recovery comes after falls of 6.9 and 5.9 per cent on 23 and 24 August respectively. The Tasi is still down 9.5 per cent on the beginning of the year.

The Dubai Financial Market (DFM) main index gained 4.61 per cent, as benchmark shares in local developer Emaar rebounded by 3.4 per cent.

The Qatar Exchange Index also rebounded by 3.2 per cent, after dropping 5.3 per cent on Sunday.

GCC equity falls in August 2015
MarketDaily percentage changes to main index (23 August)Daily percentage changes to main index (24 August)Daily percentage changes to main index (25 August)
Bahrain Bourse-0.37-0.80-0.04
Source: MEED

After institutional emerging market funds and fearful investors sold off shares across the board early in the week, there were good opportunities to invest in well-managed companies below their usual price.

The losses were mainly due to falls in oil price. Brent crude dipped below $43 a barrel on 24 August, before stabilising. Commentators expect a slight rebound due to steady levels of demand.

Volatility across all commodity prices was based on fears that China, one of the biggest importers, would see demand slow. Bloomberg’s commodity index fell 8.1 per cent on Monday, although gold prices began to recover.

Negative economic data from China has caused turmoil on stock markets across the world this week. But while Chinese stocks continue their freefall, markets in the rest of Asia, Europe and North America also saw a rebound on Tuesday 25 August.

The Chinese government cut interest rates in response, while the US Federal Reserve is expected to delay interest rates rises previously expected in September.

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