Markaz: GCC market outlook 2020 mostly stable
Thursday, 01 23 2020, Category: Economy, Country: Gulf Cooperation Council
Kuwait Financial Centre “Markaz” recently released its outlook on GCC markets for the full year of 2020. In this research report, Markaz analyses the performance of GCC stock markets in 2019 and provides an outlook for 2020 based on a four-force framework that includes economic outlook, corporate earnings potential, valuation attraction, and market liquidity, for all the GCC markets.
Markaz report said that the year 2019 was characterised by average oil price at levels lesser than that of 2018, fears of global slowdown, and uncertainties over U.S–China trade war, Brexit and interest rate cuts by most Central Banks. In addition to these, weakness in real estate and commodity markets, OPEC+ production cuts, market reforms and index inclusions were the prime market drivers in GCC. At the start of 2019, we were positive on Kuwait and UAE and stable on Saudi Arabia and Qatar. Except UAE, other markets moved in line with our expectations.
The report pointed out that the oil prices in 2020 are expected to remain around 2019 levels, in the range of USD 61-65 per barrel, in spite of recent geopolitical spikes, and we expect a moderate improvement in corporate earnings. GCC governments’ expansionary spending is expected to aid non-oil economic growth, while global economic conditions also seem conducive. Given the modest oil price outlook and proposed spending plans, government finances are expected to be strained.