Oil Lifts Gulf Markets, Egypt Falters
Stock markets across the Gulf rose on Monday, March 18th, 2024, buoyed by a strong showing in oil prices. The lone exception was Egypt, whose blue-chip index suffered a steep decline for the second day in a row.
Oil Prices Drive Gains
The primary driver behind the positive performance in the Gulf was the rise in oil prices. Brent crude, a key benchmark, climbed 0.8% to $86.02 a barrel by midday GMT, fueled by ongoing attacks on Russian energy infrastructure. This rise in oil prices is a welcome sign for Gulf economies, which are heavily reliant on hydrocarbon exports.
Abu Dhabi Leads the Charge
The Abu Dhabi stock exchange emerged as the biggest gainer, with its benchmark index rising 0.7%. This rise comes after a period of losses for the index. The positive sentiment was bolstered by gains in companies tied to the oil sector, such as Abu Dhabi National Oil Company’s (ADNOC) subsidiaries ADNOC Drilling and ADNOC Logistics. Notably, ADNOC recently signed a significant 15-year deal to supply liquefied natural gas (LNG) to Germany.
Saudi Arabia and Qatar See Modest Gains
Saudi Arabia’s TASI index also managed a small increase of 0.1%, extending its winning streak to five consecutive sessions. The rise was supported by strong performances from major banks like Saudi National Bank and Saudi Awwal Bank. Qatar’s Qatari Stock Exchange witnessed a marginal increase, with gains in companies like Qatar Gas Transport and Industries Qatar offsetting losses in Doha Bank and Masraf Al Rayan.
Egypt’s Puzzling Decline
While the Gulf celebrated gains, Egypt’s stock market experienced a significant downturn. The EGX30 index plunged a hefty 6.3%, marking its steepest decline since January. The reasons behind this sharp drop remain unclear, although some analysts speculate it could be due to investor concerns about the country’s economic outlook or recent political developments.
Looking Ahead
The future trajectory of Gulf markets will likely depend on the direction of oil prices. Continued geopolitical tensions and potential disruptions to supply could push oil prices even higher, benefiting Gulf economies. However, other factors like global economic conditions and central bank policies will also play a role. Egypt’s stock market will need to find its footing, and investors will be closely watching for signs of stabilization or further decline.
