Gulf equities decline as oil prices hit fresh low

Dubai - GCC market capitalisation falls 0.7% at $1.096 trillion in July

Qatari stocks led losses in most equity markets across the GCC after Brent crude slumped to the lowest level since January.
The latest setback comes after mixed performances in July as GCC bourses continued to be weighed down by the crude oil price plunge.  
On Friday, Brent, the benchmark grade for more than half of the world's oil, dropped 1.8 per cent to $48.61 a barrel, the lowest since January 28. Prices have fallen more than 50 per cent in the past 12 months. Natural gas for September delivery declined 0.5 per cent to settle at $2.798 per million British thermal units on the New York Mercantile Exchange.
When the market opened on Sunday, Qatar's QE Index retreated 1.4 per cent to 11,610.22 points, its weakest close since April 1.
Dubai's benchmark DFM General Index's fell 0.6 per cent, while Saudi Arabia's Tadawul All Share Index gained 0.2 per cent. Earlier, the main measure for the largest Arab economy slid as much as 1.1 per cent.
Emaar Properties, Dubai's biggest developer, was the top contributor to losses in the emirate's stock index. Abu Dhabi's ADX General Index fell 0.6 per cent as Dana Gas, the Sharjah-based energy explorer, bucked the trend, rising seven per cent in more than four times the three-month average daily volume.
In Saudi Arabia, Al Rajhi Bank, the lender with the biggest weighting on the measure, led the recovery with a 0.5 per cent increase. The 14-day relative strength index of the Saudi gauge was at 24 at the end of last week, the lowest level since December. A level below 30 indicates that the equities have dropped too fast and are poised to recover.
Kuwait's stock index also erased losses to close 0.4 per cent higher. Bahrain's measure was little changed, while Oman's MSM30 Index dipped 0.4 per cent.
The EGX30 Index in Egypt slid 1.1 per cent to 8,027.44 points and headed for the lowest close in almost two weeks. The measure gained 1.3 per cent last week. Talaat Moustafa Group was the top decliner with a 3.9 per cent slump, the sharpest drop since July.
The combined market capitalisation of GCC bourses declined 0.7 per cent month on month to $1.096 trillion in July. Market capitalisation of Saudi Arabia, Kuwait, Qatar, and Bahrain declined, while it increased for Abu Dhabi, Dubai, and Oman.
However, since Saudi Arabia was the largest contributor ($561.8 billion, or 51.3 per cent) to the total value, it dragged down the total. Qatar contributed ($172.4 billion or 15.7 per cent) to the total market capitalisation in the GCC, Global Investment House said.
Abu Dhabi and Dubai together contributed $222.9 billion (20.3 per cent) to the total; Kuwait, Oman, and Bahrain together contributed $138.7 billion.
In July, trading across GCC markets declined. The volume traded fell 36.9 per cent, as all markets, except Oman, recorded a decline in trading volumes. The value traded fell 30.3 per cent month on month amid a drop in the trading values of all countries, except Oman. Market activities were subdued during Ramadan with GCC markets closed for Eid. Saudi Arabia was the biggest contributor ($14.0 billion) to the total trading value ($18.9 billion). 
Plunging oil prices are putting pressure on economies in the GCC, which rely on income from energy revenue to fund their state budgets. Brent capped a sixth weekly loss on Friday amid speculation that the return of drilling rigs in the US and Iranian shipments will prolong a global glut. The GCC is home to almost a third of the world's proven crude reserves.
- issacjohn@khaleejtimes.com