PHOTO
08 August 2016
The recently announced Qatar's fuel subsidy reform will help the country shrink its budget deficit by reducing expenditures; a move that will help investments in private sector," according to Kuwait Financial Centre (Markaz).
Fuel prices in Qatar were allowed to fluctuate in response to changes in the global market from May 1. The monthly revision in local fuel prices followed the government's decision on fuel subsidy reforms in Qatar.
Qatar's equity market, Markaz said, "performed well" last month on the back of positive quarterly earnings that led to increased investor activity.
The Qatar Stock Exchange index gained 7.3% in July, indicating that QSE's was the best performance in the GCC region.
Markaz report noted that blue chips drove Qatar's index surge, with real estate (8.52%), telecoms (7.94%) and banking stocks (7.1%) performing well in July.
In its monthly market research report, Markaz said July was a "marginally positive" month for the Mena indices, with most markets ending the month in green, as positive quarterly earnings led to increased investor activity.
Markets in Egypt (13.1%), Qatar (7.3%) and Dubai (5.2%) performed well, while Saudi's TASI (-3.0%) and Kuwait weighted (-0.2%) indices lagged behind.
The negative performance of the largest GCC market led to flat performance of S&P GCC index. Other indices witnessed slight rise in index values, despite the steepest monthly fall in oil prices in 2016. Egypt HRMS index rose in the last week of the month, as the country's plan to secure a $12bn loan from the International Monetary Fund (IMF) was close to fruition.
The loan is being sought to ease a crippling dollar squeeze, and restore confidence in the economy, and would be the fund's biggest aid package in a region that has been pummelled by political unrest and oil price fall.
Saudi index fell due to fall in oil price, and the continued resilience of shale oil, as increasingly efficient US shale production continues to drive a wedge in Opec's strategy of flooding the market with excess crude, it said.
Blue Chips had a mixed July, with Emaar Properties (UAE) and Ezdan Holdings (Qatar) ending the month at the top, gaining 10% and 9.6%, respectively.
National Commercial Bank (Saudi Arabia) and First Gulf Bank (UAE) witnessed a slump, losing 6% and 4.4%, respectively.
Positive Q2 results contributed to improved market performance for most companies in the region, as investors returned to the markets post Ramadan. Dubai's Emaar Properties reported a 8% rise in Q2 net profit, as strong investor demand led to higher revenue recognition. Ezdan Holdings half-yearly profit went up 8%, driven by rise in operations.
Despite posting a profit of 3.2% in Q2, shares of National Commercial Bank declined the most in July, as the bank proposed a lower dividend for the first half of the year, as compared to the previous year.
Q2 profits of First Gulf Bank slipped 10%, meeting analyst estimates, while the merger between FGB and National Bank of Abu Dhabi was confirmed early in July, Markaz noted.
The report also noted that the large aggregate current account surpluses of GCC countries are expected to widen to $89bn or 6.5% of their GDP this year as they turn to both domestic and foreign debt markets to finance their rising fiscal deficits, a new report has shown.
Since mid-2014, the drop in oil prices has shifted the large aggregate current account surpluses of GCC countries, accumulated in the past decade, to a deficit of $35bn in 2015, Kuwait Financial Centre (Markaz) has said in a report.
"This trend is likely to persist in the short to medium term", it said.
The large resident capital outflows in the form of investments, which peaked at $384bn in 2013, have virtually disappeared, and international reserves are being used to fund widening deficits.
Prior to 2016, GCC sovereign debt issuance had been relatively sparse, barring Bahrain, particularly in foreign currency, and usually reserved for benchmarking or for monetary policy purposes.
Thus far, in 2016, both Abu Dhabi and Qatar have tapped international markets with sizeable issues, Markaz said.
The recently announced Qatar's fuel subsidy reform will help the country shrink its budget deficit by reducing expenditures; a move that will help investments in private sector," according to Kuwait Financial Centre (Markaz).
Fuel prices in Qatar were allowed to fluctuate in response to changes in the global market from May 1. The monthly revision in local fuel prices followed the government's decision on fuel subsidy reforms in Qatar.
Qatar's equity market, Markaz said, "performed well" last month on the back of positive quarterly earnings that led to increased investor activity.
The Qatar Stock Exchange index gained 7.3% in July, indicating that QSE's was the best performance in the GCC region.
Markaz report noted that blue chips drove Qatar's index surge, with real estate (8.52%), telecoms (7.94%) and banking stocks (7.1%) performing well in July.
In its monthly market research report, Markaz said July was a "marginally positive" month for the Mena indices, with most markets ending the month in green, as positive quarterly earnings led to increased investor activity.
Markets in Egypt (13.1%), Qatar (7.3%) and Dubai (5.2%) performed well, while Saudi's TASI (-3.0%) and Kuwait weighted (-0.2%) indices lagged behind.
The negative performance of the largest GCC market led to flat performance of S&P GCC index. Other indices witnessed slight rise in index values, despite the steepest monthly fall in oil prices in 2016. Egypt HRMS index rose in the last week of the month, as the country's plan to secure a $12bn loan from the International Monetary Fund (IMF) was close to fruition.
The loan is being sought to ease a crippling dollar squeeze, and restore confidence in the economy, and would be the fund's biggest aid package in a region that has been pummelled by political unrest and oil price fall.
Saudi index fell due to fall in oil price, and the continued resilience of shale oil, as increasingly efficient US shale production continues to drive a wedge in Opec's strategy of flooding the market with excess crude, it said.
Blue Chips had a mixed July, with Emaar Properties (UAE) and Ezdan Holdings (Qatar) ending the month at the top, gaining 10% and 9.6%, respectively.
National Commercial Bank (Saudi Arabia) and First Gulf Bank (UAE) witnessed a slump, losing 6% and 4.4%, respectively.
Positive Q2 results contributed to improved market performance for most companies in the region, as investors returned to the markets post Ramadan. Dubai's Emaar Properties reported a 8% rise in Q2 net profit, as strong investor demand led to higher revenue recognition. Ezdan Holdings half-yearly profit went up 8%, driven by rise in operations.
Despite posting a profit of 3.2% in Q2, shares of National Commercial Bank declined the most in July, as the bank proposed a lower dividend for the first half of the year, as compared to the previous year.
Q2 profits of First Gulf Bank slipped 10%, meeting analyst estimates, while the merger between FGB and National Bank of Abu Dhabi was confirmed early in July, Markaz noted.
The report also noted that the large aggregate current account surpluses of GCC countries are expected to widen to $89bn or 6.5% of their GDP this year as they turn to both domestic and foreign debt markets to finance their rising fiscal deficits, a new report has shown.
Since mid-2014, the drop in oil prices has shifted the large aggregate current account surpluses of GCC countries, accumulated in the past decade, to a deficit of $35bn in 2015, Kuwait Financial Centre (Markaz) has said in a report.
"This trend is likely to persist in the short to medium term", it said.
The large resident capital outflows in the form of investments, which peaked at $384bn in 2013, have virtually disappeared, and international reserves are being used to fund widening deficits.
Prior to 2016, GCC sovereign debt issuance had been relatively sparse, barring Bahrain, particularly in foreign currency, and usually reserved for benchmarking or for monetary policy purposes.
Thus far, in 2016, both Abu Dhabi and Qatar have tapped international markets with sizeable issues, Markaz said.
© Gulf Times 2016
