The Saudi market registers its first loss in 7 years… and the Egyptian Stock Exchange leads 2022 earnings

The Saudi market index has closed trading in decline, recording the first annual loss in seven years, while the Egyptian stock market scored the best performance among Middle East markets in 2022.

The Saudi index fell 0.1% today, under pressure from a 1.1% drop in the share of Al-Rajhi Bank.

The index, which reached a nearly 17-year high in early May, closed out the year in down 7.1%, close to a 20-month low.

According to Wael Makarem, market analyst senior for the Middle East and North Africa at Exness, equity markets have had a tough time in 2022 due to the severe impact of inflation, interest rate hikes and war in Ukraine to investor sentiment, according to Reuters.

Most of the Gulf Cooperation Council countries, including Saudi Arabia, the United Arab Emirates and Qatar, peg their currencies to the dollar and closely follow the moves of the US Central Bank, which makes the region vulnerable to the direct impact of monetary policy tightening in the world’s largest economy.

The National Bank of Saudi Arabia, the largest bank in the kingdom, has closed the transactions in rise of 1.2%. But the bank has still lost more than $15 billion of its market value since Oct. 27 after it pledged to invest up to 1.5 billion Swiss francs ($1.62 billion) in the troubled Credit Suisse group.

As for oil giant Aramco, which overtook Apple in May to take the throne as the world’s largest company, gave up those gains to finish the year close to where it started, posting annual losses of 1. 4%.

Qatar’s index fell 1.1%, posting its first annual loss since 2017, in decline of 8.1% during the year.

Makarem claimed that war in Ukraine has caused sharp fluctuations in energy prices, which in turn have affected economies around the world and the performance of companies in many industries, from transportation to retail.

He added: “The fear of an economic slowdown dominated the markets during the year, and this could extend into 2023, with the possibility of a recession still present.”

Oil prices, a major catalyst for financial markets in the Gulf, have risen by 80% questyear before giving up most of their earnings.

Kuwait Stock Exchange posted gains of 6.5% questyear, while the Sultanate of Oman stock market rose by 17.6%. The Bahraini index closed the year in increase of 5.5%.

Outside the Gulf region, Egypt’s main index posted gains for the year of 22% and is up 0.1% today.

Egypt’s stocks went from losses to gains in the last quarter, after an agreement with the International Monetary Fund and support from the central bank to allow lenders greater flexibility in the trading of currencies.

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