GCC equity markets rose 5.9% during 2019

  • 5th, February, 2020
GCC equity markets rose 5.9% during 2019

The MSCI GCC stock index rose 5.9% in 2019 – its fourth consecutive year of gains – although this was far behind global indices: the MSCI World Index rose 25.2% in 2019, and emerging markets rose 15%. Nonetheless, some GCC market did perform well: Kuwait's Premier Market rose by 32% and the Bahrain Bourse rose by 20.4%

These figures are taken from a useful review of GCC equity markets recently published by Kamco Research, which is part of Kamco Invest, the Kuwait-based asset manager, investment bank and broker. 

Saudi Aramco's IPO overshadowed GCC equity markets in 2019. The listing took the Tadawul's market capitalisation to about $2,400bn at the end of 2019, from about $507bn a year before. Following the sale of additional shares through a 'green shoe' option, 1.7% of Aramco is listed, and the company raised about $29.4bn.

The Tadawul gained 7.2% over 2019. Year-to-date gains stood around 20% in May but then fell back as a result of geopolitical events and also as a result of investors taking profits from the boost generated by the inclusion of the Tadawul in the MSCI emerging market index. Oman was the only GCC index to show a year-on-year loss at the end of 2019 – the Muscat Securities Exchange was down 7.9%. 

GCC markets do show a lot of year-to-year volatility. Dubai was the worst performer in 2018 but showed a gain of 9.3% in 2019. Qatar was the best performer in 2018, but showed gains of only 1.2% in 2019. 

Trading in GCC stock markets is often dominated by a few stocks. For example, the value of shares traded on the Abu Dhabi Securities Exchange during 2019 was $14bn, of which First Abu Dhabi Bank accounted for $5.7bn, Abu Dhabi Commercial Bank $2.1bn and Etisalat $1.5bn. In Kuwait, the value of shares traded was $ $26.3bn of which Kuwait Finance House accounted for $4.3bn, National Bank of Kuwait  $3.6bn, Ahli United Bank (Kuwait) $2.6bn and Gulf Bank $2.3bn. In Qatar, the total value of shares traded during 2019 was $18.6bn, of which Qatar National Bank accounted for $3.4bn, Qatar Fuel Company $1.5bn, and Mesaieed Petrochemical $1.3bn.

Kamco's report can be seen here. A summary of key GCC stock market statistics can be see below. 

GCC IPO issuance declines

In a separate report, Kamco notes that there were only nine IPOs in the GCC during 2019, compared to 17 in 2018 and 27 in 2017. Five of the nine were in Saudi Arabia, two were in Kuwait, and there was one in Qatar and one in Oman. Excluding the $29,438.4mn raised by Saudi Aramco, the total amount raised was $1,646.9mn, Kamco reports. The four non-Aramco IPOs in Saudi Arabia accounted for about two thirds of this, with the real estate company Arabian Centres raising $658.6mn. 

More details can be found in the Kamco report via this link.

The table below provides some key data points from GCC stock markets.