Global equities recorded a positive performance during the week as investors were encouraged by improving macroeconomic indicators, especially better-than-expected retail sales and strong upsurge in housing demand in the US. Furthermore, positive signs on vaccine development during midweek also boosted sentiments, which appeared to ease resurgence concerns. Oil prices were down 0.23% during the week as OPEC and its allies agreed to lower supply cuts from August 2020 amid growing uncertainty over the recovery in oil demand due to resurgence in new COVID-19 cases.
For the MENA region, equity markets continued to underperform the global markets, which can be largely attributed to depressed oil prices and its subsequent impact on the regional economies. For the week, 5 out of the 7 regional indexes closed in negative territory, while Bahrain and Saudi Arabia closed in positive territory with gains of 1.26% and 0.14%, respectively. Egypt was the worst performer regionally with losses of 4.71%, followed by 1.42% in Dubai, 1.25% in Oman, 1.21% in Kuwait, and 0.49% in Abu Dhabi.
Going forward, the outlook remains uncertain as the resurgence in new COVID-19 cases could possibility slowdown the global economic recovery. The acceleration in economic activity witnessed during the past two months has been encouraging, but it will be important to maintain the demand trajectory to continue the pace of recovery in economic activity. Volatility in equity markets are likely to remain at elevated levels, which will be largely influenced by reoccurrence of new virus cases.
For the MENA region, performance of the equity markets will be dominated by movement in oil prices and upcoming earnings season. Moreover, investors will draw meaningful cues from corporate earnings to gauge the real impact on businesses and accordingly position themselves within the markets.
About Allied Investment Partners PJSC
Established in 2007, Allied Investment Partners PJSC is licensed by Securities and Commodities Authority, UAE and is a leading investment firm providing various services like Asset Management, Alternative Investments, Wealth Management, Securities and Custody Services, Corporate Finance and Investment Banking Advisory.
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