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GCC MSCI index hits 7-year highs led by insurance, banks

1 Sep 2021

The MSCI GCC index posted gains for the tenth consecutive month during August 2021 backed by gains in key large-cap sectors such as banks and insurance.

The index – which captures large- and mid-cap representation across the GCC stock markets – closed at a seven-year high level on August 17, but as investors booked profits, the MSCI GCC index receded towards the end of the month to close at 708.48 points, registering a monthly gain of 4.3 per cent.

This further pushed year-to-date 2021 gains to 28.6 per cent for the aggregate MSCI GCC Countries Index, according to a bulletin released by Kamco Investment on Wednesday.

It said the GCC markets’ performance during August this year was broadly positive as barring Oman the remaining six exchanges in the GCC posted monthly gains.

UAE exchanges reported the highest gains during the month, both recording gains of 5 per cent. Qatar and Kuwaiti benchmarks followed with monthly gains of 3.2 per cent and 3.1 per cent, respectively.

The gains in Abu Dhabi once again pushed the year-to-date returns for the benchmark to the highest level among key global markets with a gain of 52.3 per cent. Saudi Arabia’s main index also showed solid gains of 

30.3 per cent since the start of the year followed by Kuwait’s main index with a gain of 22.4 per cent.

Qatar and Oman were the only benchmarks with single digit year-to-date gains, while the rest of GCC indices showed double-digit performances.

‘The Omani stock market declined for the second consecutive month and was the only market in the GCC to close in the red during August. The MSX30 index showed declining trend since the start of the month only to show partial recovery during the last week,’ the report said.

The benchmark index of the Muscat Stock Exchange traded below the critical support level of 4,000 points during August and closed at 3,966.7 points with a monthly decline of 1.6 per cent.

With the decline during August, the MSX30 index now shows the second-smallest year-to-date 2021 gain in the GCC at 8.4 per cent. 

‘Sector performance remained mixed during the month with gains of 2 per cent recorded by the industrial index whereas the services and financial indices reported declines of 0.5 per cent and 1.9 per cent, respectively,’ the Kamco Investment report said.

The monthly gains further pushed the year-to-date growth for the industrial index 38.8 per cent, the highest in the market, followed by financial and services indices with returns of 11.9 per cent and 7.1 per cent, respectively.

Total net profits for listed companies in Oman increased by 22.3 per cent to RO200.1mn in the second quarter of 2021 compared with RO164.1mn in the corresponding quarter in 2020, according to Kamco Investment. This was the smallest profit growth recorded among the GCC markets, it added.

Kamco Investment’s report showed mixed returns in the GCC markets during August but highlighted gains for key large-cap sectors. It also highlighted the effects of waning COVID-19 cases in the region as investors booked profits on sectors that were resilient during the pandemic resulting in a decline in these sectoral indices during August.

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