Financial analysts and market experts predict a downturn for Gulf stock markets this summer. They foresee lower stock values, reduced trading volumes, sectoral stagnation, delayed investment decisions, and a focus on holding strong positions in high-performing large-cap stocks.
This trend is driven by the majority of traders taking their annual vacations during this period. Typically, sectors like travel, tourism, aviation, and hospitality see seasonal growth in summer.
From the start of 2024 to mid-year, Gulf markets have shown mixed results. Muscat Securities Market rose by 3.8%, Bahrain Bourse by 3.5%, and Kuwait Stock Exchange by 1.33%. However, Qatar Stock Exchange dropped by 8.02%, Abu Dhabi Securities Exchange by 5.4%, Saudi Arabia’s main index by 1.99%, and Dubai Financial Market slightly by 0.7%.
Tareq Al-Ateeq, a financial analyst, told Asharq Al-Awsat that investor behavior across Gulf markets tends to align during summer due to holiday seasons and high temperatures, leading to lower liquidity and fluctuating market indices.
Investors are delaying decisions until summer ends, focusing on robust positions in large-cap and defensive stocks, which is expected to dampen market liquidity and activity in July and August 2024.
Certain sectors like travel, tourism, aviation, and hospitality are anticipated to see increased trading during the summer. Some investors aim to capitalize on market downturns by adjusting their sector allocations.
In 2023, markets like Dubai saw a 6% monthly increase, with Saudi Arabia's market index rising by 4%. Oman also experienced a 3.1% increase, while Qatar and Bahrain markets declined by 0.8% and 0.3% respectively.
Key sectors such as consumer goods, utilities, tourism, hospitality, and energy are showing increased trading activity and interest during the summer season.
