Complex Made Simple

Markets give a mixed performance with Ramadan in its second week

Egypt being the star ending the week up by 2.8 per cent and Qatar leading the losing side by 1.2 per cent over the week, followed by Abu Dhabi and Saudi Arabia each by 0.8 per cent and 0.1 per cent respectively.

US markets had a positive close for last week, with Dow, Nasdaq and S&P500 reaching their all-time highs, ignoring a recent job report that came below expectations.

Oil on the other hand, ended the week on a negative note, again below the $50 mark on the back of the same story of US Shale which will continue to distort the supply/demand picture despite OPEC extending cuts.

On the regional front, with Ramadan in its second week, markets had a mixed performance with Egypt being the star. The Egyptian market managed to end the week up by 2.8 per cent reaching a recent high of 13,467 points after the president ratified the new investment law.

Kuwait came in second in the win column, up by 1.9 per cent over the week, maintaining its YTD returns of 18.5 per cent. Bahrain, Dubai and Oman followed with small gains ending the week up 0.8 per cent, 0.7 per cent and 0.6 per cent respectively.

On the losing side, Qatar came in first, losing 1.2 per cent over the week, followed by Abu Dhabi and Saudi Arabia each by 0.8 per cent and 0.1 per cent respectively.

Global commentary

1. US stock markets advanced over the past week, supported by strong economic data. The Nasdaq Composite Index gained 1.5 per cent, while the S&P 500 climbed 1.0 per cent, backed by technology and financial sectors. Meanwhile, the Dow Jones rose 0.6 per cent.

2. European markets gained last week, backed by stronger-than-expected manufacturing PMI data. The DAX jumped 1.8 per cent, owing to a rise in German car registration data, while the CAC 40 edged up 0.1 per cent. However, the FTSE 100 ended on a flat note.

3. Most stock markets in the GCC region rose over the previous week. Kuwait and Bahrain jumped 1.9 per cent and 0.8 per cent, respectively, while Dubai advanced 0.7 per cent, driven by real estate stocks. Oman climbed 0.6 per cent. On the other hand, Qatar and Abu Dhabi dropped 1.2 per cent and 0.8 per cent, respectively.

4. Most Asian markets advanced last week. The Nikkei 225 jumped 2.5 per cent, led by strong economic data, while the Hang Seng Index and the KOSPI rose 1.1 per cent and 0.7 per cent, respectively. However, the Shanghai Composite Index edged down 0.1 per cent.

5. Brent crude dropped 1.3 per cent on Friday, as the Trump administration’s decision to withdraw from the climate deal added concerns to the global glut. Key crude contracts Brent and WTI ended at $49.95 (-1.3 per cent) and $47.66 (-1.5 per cent), respectively.

Saudi commentary

1. Tadawul All Share Index (TASI) lost 7.62 points or 0.11 per cent to close at 6,863.62. Fifteen of the twenty sector indices closed lower. The advance decline ratio was 54/107. Trading turnover was around SAR 2.2 billion.

2. Saudi Telecom to improve offer on Turkish unit’s loan: Saudi Telecom Co. (STC) has improved its offer to banks on a $4.75bn loan for the Turkish unit, Oger Telecom, which failed to pay two installments on the debt, according to financial website Argaam.

3. Bahri to get new $90 million VLCC on June 12: The National Shipping Company of Saudi Arabia (Bahri) will be receiving a new Very Large Crude Carrier (VLCC) worth $90m on June 12 from South Korea’s Hyundai Samho Heavy Industries Co. (HSHI).

4. AMIC completes mechanical works at Yanbu Titanium Sponge project: Advanced Metal Industries Co. (AMIC), which is equally owned by Tasnee and Cristal, completed the mechanical works of the titanium sponge project in Yanbu Industrial City on May 31, Tasnee said.

With oil struggling to reach the $50 and Ramadan in full swing, markets are expected to stay in a tight trading range unless positive economic or specific company news occurs and changes the current scenario.