Kamco Investment: GCC index drops 4.7% as new Covid-19 variant spooks investors

02 Dec 2021

Riyadh-Maaal

GCC markets declined for the first time in 13 months in November-2021 as the new Covid-19 variant, Omicron, sent shockwaves across financial markets globally.

The MSCI GCC index dropped 4.7% during the month, in line with most major exchanges globally. In terms of market-cap, total value of listed stocks in the region declined by USD 205 Bn to reach USD 3.5 Trillion by the end of the month.

The monthly decline during November-2021 dented the performance of GCC markets since the start of the year which now stands at 29.7%.

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Within the GCC, Abu Dhabi and Dubai exchanges remained largely resilient to the global pressure, although even these markets were not spared on 28-November-2021, which saw steep global single day sell-off, with declines of 1.8% and 5.2%. Most GCC markets reported a decline during November-2021, barring ADX and DFM that reported a gain of 8.7% and 7.3%, respectively.

Saudi Arabia’s TASI reported the biggest decline of 8.1% losing almost USD 240.3 Bn in market-cap during the month.

The decline highlighted the impact of the slide in oil prices to below USD 70/b mark, although briefly.

The month also saw Abu Dhabi further strengthening its global lead in terms of market performance since the start of the year with a return of 69.4%, one of the highest globally. Dubai also scaled up to be the third best performing market in the GCC with a YTD-21 return of 23.3%.

On the other hand, Saudi Arabia remained the second ranked market in the GCC, but with a smaller lead over Dubai with a gain of 23.8%.

The GCC sector performance chart showed declines across the board during November-2021 with the exception of Diversified Financials and Telecom indices that reported gains of 5.3% and 4.2%, respectively, while Real Estate was almost flat with a gain of 0.1%.

Consumer Durable & Apparel was the biggest decliner with a monthly fall of 21.5% followed by Utilities and Pharma & Biotech indices with declines of 13.5% and 12.4%, respectively.