The Bahrain Bourse experienced a momentary pause in its upward trajectory in July, with the benchmark All Share Index declining 2.7 per cent to close below the 2,000-point mark at 1,969.9 points.

While this represents the sharpest monthly decline in five months, market participants remain optimistic about the bourse’s long-term prospects.

According to a report by Kuwait-based Kamco Invest, the index’s volatility was mirrored in sectoral performance. While the Materials, Real Estate, and Consumer Discretionary indices faced headwinds, contracting by 9.3pc, 3.4pc, and 3.2pc, respectively, the Consumer Staples and Communications Services sectors demonstrated resilience, registering modest gains of 0.6pc and 0.1pc.

Despite the July pullback, the bourse has exhibited strong performance year-to-date, with certain segments showcasing notable growth. The Real Estate index, although facing challenges in July, remains a focal point for investors due to its long-term potential.

Individual stocks showcased a mixed performance. GFH Financial Group emerged as a standout, surging 13.3pc on the back of strategic initiatives, including the sale of treasury shares and the successful launch of a new investment fund. Nass and Bahrain Flour Mills also delivered commendable performances, although trading volumes remained subdued.

On the other hand, Arab Insurance Group faced headwinds, plunging 23.4pc. Bahrain Islamic Bank and Alba also experienced declines of 11.8pc and 9.3pc, respectively.

Encouragingly, trading activity rebounded from the previous month’s low levels. Total volume and value traded reached 220.8m shares and BD26.6m, respectively. GFH Financial Group accounted for a significant portion of the trading activity, followed by Alba and Al Salam Bahrain.

Encouragingly, the Bahrain Bourse has taken proactive steps to enhance market liquidity and attract international investment. The introduction of new guidelines for technical uncovered short-selling and a revamped regulatory framework for market making are expected to foster a more dynamic and efficient trading environment.

While the July performance may have dampened short-term sentiment, the bourse’s underlying fundamentals remain robust. As the market continues to evolve, investors are closely monitoring sectoral trends and individual stock performance to identify new opportunities.

Looking at the GCC region as a whole, equity markets surged last month, buoyed by robust corporate earnings that set a positive tone for the second quarter results season. The MSCI GCC Index climbed 4.4pc, its strongest monthly gain this year, erasing some of its year-to-date losses.

Dubai led the regional rally with a 5.9pc jump, followed by Kuwait and Saudi Arabia, which gained 4.4pc and 3.7pc, respectively. Kuwait reclaimed the top spot in terms of year-to-date performance with a 6.2pc return, edging out Dubai’s 5.1pc. Qatar remained the laggard, down 6.2pc year-to-date.

The banking sector’s results were particularly encouraging, with falling impairments boosting profits despite flattish net interest income amid rising funding costs.

Real estate was the standout sector in July, soaring 8.1pc as large-cap names like Aldar Properties, Dar Al Arkan Real Estate, and Saudi Real Estate posted double-digit gains. Utilities followed with a 7.7pc increase, while banks and capital goods climbed 5.9pc and 4.3pc, respectively. A separate report by Kamco shows that foreign investors, including institutions and retail, snapped up $3.5bn worth of GCC stocks in the second quarter, a surge from $1.5bn in the first three months, data showed on Sunday. Bahrain was a standout, with $43.3mn of net inflows – its best in five years.

While the overall market was mixed, with four of seven exchanges declining, foreign buying persisted, driven by a combination of factors including regional market trends, IPOs, geopolitics, and economic performance. Seasonal selling pressure during Eid holidays also contributed to local investor offloading, which was countered by foreign buying.

Trading activity cooled in Q2, with total volume dropping 14pc to 69.3bn shares. However, Bahrain and Dubai bucked the trend, posting gains. Total value traded also fell to $158bn from $202bn in Q1, with Bahrain again the exception.

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