Where are GCC stock markets headed in 2024?

GCC stock markets will continue on a strong growth trajectory this year, led by the UAE and Saudi Arabia, on the back of strong macroeconomic fundamentals, a vibrant investment landscape, cooling inflation globally and higher expectations of rate cuts, analysts say.

Economic growth, especially in the non-oil sector, will strengthen in 2024, driven by strong government spending, which in turn will support markets.

“Saudi Arabia and the UAE appear particularly promising from an economy and markets perspective,” said Faisal Hasan, chief investment officer and head of asset management at Al Mal Capital.

“The region will continue to see a strong pipeline of [initial public offerings], which will increase the breadth of the markets.”

Stock markets in the GCC ended the year on a largely bullish note, in line with a strong rebound in regional economies.

The GCC equity market index closed 2023 at 714.69 points, registering a gain of 3.7 per cent, after recording mixed performances at the country level, Kamco Invest said in a note.

Saudi Arabia’s Tadawul stock exchange, the Arab world’s biggest, closed 2023 up 14.2 per cent, while the Dubai Financial Market was the best performing index, ending the year 21.7 per cent higher.

The Abu Dhabi Securities Exchange, the region’s second-largest stock market by value, fell 6.2 per cent for the year.

The Qatar Stock Exchange ended 2023 up 1.4 per cent, Bahrain was up 4 per cent, Oman’s index closed 7.1 per cent lower, while Kuwait’s bourse was down 6.5 per cent for the year.

Markets in the wider Mena region also posted a mixed performance. Egypt’s EGX 30 index was the best performer in the entire region, gaining more than 70 per cent last year.

This was followed by Morocco with gains of 13 per cent, Lebanon up 10 per cent, Tunisia posting an increase of about 8 per cent, while Jordan’s index ended the year around 3 per cent lower.

“The UAE and Saudi Arabia lead the region and have undertaken ambitious diversification efforts to reduce oil dependence and stimulate growth in non-oil sectors,” Vijay Valecha, chief investment officer at Century Financial, wrote in a recent opinion piece in media.