GCC equity markets post monthly gains in January: Markaz

RIYADH: Equity markets in the Gulf Cooperation Council countries saw strong growth in January, with Kuwait and Saudi Arabia emerging as top performers, according to an analysis. 

In its latest report, Kuwait Financial Center, also known as Markaz, said the substantial increase in the equity markets of Kuwait and the Kingdom pushed up the S&P GCC Composite Index by 3 percent last month. 

Kuwait’s All Share Index posted a monthly gain of 5.7 percent in January, followed by Saudi Arabia’s equity market which grew by 3.1 percent during the same period. 

The S&P GCC Composite Index’s performance in January was higher than the S&P 500 indices, which expanded at 2.7 percent, and the MSCI EM index, which posted a growth of 1.7 percent. The MSCI World Index grew by 3.5 percent. 

“Kuwait equities outperformed global and GCC markets driven by the anticipation of strong earnings of banking stocks and the increased deal activity in the energy and real estate sectors, with most sectors closing the month in positive territory,” said Markaz. 

Abu Dhabi’s equity index rose by 1.8 percent, Dubai’s index grew by 0.4 percent, and the Qatar Stock Exchange increased by 0.9 percent in January.

Bahrain’s index fell by 5.4 percent due to the decline of Aluminum Bahrain stock by 18.5 percent after officially terminating a proposed deal with the Saudi Arabian Mining Co. 

Kuwait’s equity market growth was supported by the movement in key sectors like oil and gas and real estate, which expanded by 11.7 percent and 11.1 percent, respectively, according to the report. 

Last month, Saudi Telecom Co. was the top gainer in Tadawul, with the company’s share price rising by 8.7 percent. 

STC Bank, the financial arm of stc Group, received a non-objection certificate from the Saudi Central Bank to commence its banking operations in the Kingdom.

STC Bank is the first licensed digital bank in the Kingdom and the latest approval aligns with the financial institution’s strategy to promote digital transformation and competitiveness within the banking sector while safeguarding monetary and financial stability, SAMA said in a press statement at the time. 

Saudi Arabia’s Etihad Etisalat Co.’s share price surged by 8.4 percent, while the stock price of energy giant Saudi Aramco dipped by 0.9 percent due to a delay in phasing out OPEC+ cuts. 

Markaz added that Brent crude oil closed the month at $76.8 per barrel, marking a 2.8 percent increase from December.

“This move was driven by the US energy sanctions against Russian entities. Further clarity on (US President Donald) Trump’s trade policies, possible increase in production from the US, and the recovery of demand from China will determine the further course of oil prices,” said the report. 

Gold prices also increased by 6.8 percent month on month, closing at $2,759.3 per ounce. 

The analysis said that the outlook of global asset classes in the coming months could be shaped by Trump’s trade policies and possible changes in the US Fed’s rate cut trajectory. 

“With China being in the crosshair of Trump’s tariffs, oil prices could take a hit if the demand recovery from China weakens. Weakness in oil prices could alter OPEC+ plans to unwind production cuts, which would in turn affect GCC economies and markets,” the report added.