Experts predict performance of GCC stock markets: Key details inside

Stock markets in the GCC are expected to continue on a strong growth trajectory in 2024, led by the UAE and Saudi Arabia, supported by a vibrant investment landscape, strong macroeconomic fundamentals and cooling inflation globally, according to analysts.

Abu Dhabi and Riyadh have undertaken strong and ambitious diversification efforts to reduce reliance on oil and stimulate growth in non-oil sectors, as per a recent opinion piece in The National, submitted by the chief investment officer at Century Financial, Vijay Valecha.

“These strategic initiatives have significantly affected stock market performance, making them more attractive to investors,” he highlighted, noting: “This was evident in the robust increase in IPO activity, with the GCC region standing out globally.”

GCC markets recorded a flurry of listing activity in 2023. There were a total of 29 IPOs with total proceeds of $5.8 billion in the first nine months of the year in the Middle East and North Africa region, and all the listing activity took place in the GCC, according to consultancy EY.

Understanding economic conditions in GCC countries

GCC stock markets ended last year on a largely bullish note. The GCC equity market index closed 2023 at 714.69 points, registering an increase of 3.7%, after recording mixed performances at the country level, Kamco Invest said in a note.

The biggest in the Arab world, Saudi Arabia’s Tadawul stock exchange, closed the year up 14.2%. Meanwhile, the Dubai Financial Market indeed 2023 21.7% higher, becoming the best performing index. The Abu Dhabi Securities Exchange fell 6.2%.

Kuwait’s bourse was down 6.5% for the year, Bahrain was up 4%, Oman’s index closed 7.1% lower and the Qatar Stock Exchange ended 2023 up 1.4%. In the broader Mena region, markets posted a mixed performance. Egypt’s EGX 30 index gained over 70%, for example.

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Economic conditions in the GCC countries remain firm, amid notable improvements in consumer spending and unemployment rates. Non-oil economies are expected to report another decent performance this year, majorly due to government spending.