GCC Index Records Biggest Gain since 2008

The GCC equity market index closed in 2021 with 34.9% gains, marking the biggest gains since 2008. (Asharq Al-Awsat)
The GCC equity market index closed in 2021 with 34.9% gains, marking the biggest gains since 2008. (Asharq Al-Awsat)
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GCC Index Records Biggest Gain since 2008

The GCC equity market index closed in 2021 with 34.9% gains, marking the biggest gains since 2008. (Asharq Al-Awsat)
The GCC equity market index closed in 2021 with 34.9% gains, marking the biggest gains since 2008. (Asharq Al-Awsat)

The Gulf Cooperation Council (GCC) equity market index closed in 2021 with 34.9% gains, marking the biggest gains since 2008, according to a report by Kuwait-based Kamco Invest.

The aggregate MSCI GCC Index witnessed gains for 12 consecutive months until November 2021, when in declined by 3.4%. However, gains during December partially offset the trimmed yearly gains.

The report indicated that Abu Dhabi was the best performing market amongst prominent equity markets globally with a gain of 68.2%.

Saudi Arabia was next in the region with a healthy gain of 29.8%, closely followed by Dubai and Kuwaiti benchmarks with gains of 28.2% and 27%, respectively.

GCC equity markets outperformed its global peers with a yearly return of 34.9% in 2021 for the MSCI GCC Index.

The index recovered fully from the COVID-19 and oil-led decline of 3.7% in 2020.

Global markets had an equally exciting year with the MSCI World Index touching a record high on December 29, but declines during the last two trading sessions of the year partially trimmed the third consecutive year of gains that reached 20.1%.

Gains for both Saudi Arabia and Abu Dhabi Securities Exchange (ADX) were driven by listing of several state-owned firms amid a climate of economic optimism, large scale projects and timely execution of plans.

Several new initiatives were taken in the GCC that mainly aimed at diversifying non-oil state revenues, while making sure that their market share in the oil market remains robust by way of adding capacity.

The sector performance chart for the year showed gains mainly for the financial services sector with Diversified Financials topping the chart with a return of 62.2%, followed by Banks with a gain of 48.8%. Capital Goods index was next with a gain of 45.4%, followed by Materials and Healthcare with gains of 30.6% and 27.7%, respectively.

In terms of share of total trading activity, Abu Dhabi reported the steepest increase in trading activity with five-fold growth in value traded increasing from $19.3 billion in 2020 to $96.22 billion in 2021, resulting a share of 12.2% versus 2.9% in 2020.



China’s October New Lending Tumbles More than Expected despite Policy Support

 A masked woman walks at a fashion boutique displaying posters to promote Singles' Day discounts at a shopping mall in Beijing, Monday, Nov. 11, 2024. (AP)
A masked woman walks at a fashion boutique displaying posters to promote Singles' Day discounts at a shopping mall in Beijing, Monday, Nov. 11, 2024. (AP)
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China’s October New Lending Tumbles More than Expected despite Policy Support

 A masked woman walks at a fashion boutique displaying posters to promote Singles' Day discounts at a shopping mall in Beijing, Monday, Nov. 11, 2024. (AP)
A masked woman walks at a fashion boutique displaying posters to promote Singles' Day discounts at a shopping mall in Beijing, Monday, Nov. 11, 2024. (AP)

New bank lending in China tumbled more than expected to a three-month low in October, as a ramp-up of policy stimulus to buttress a wavering economy failed to boost credit demand.

Chinese banks extended 500 billion yuan ($69.51 billion) in new yuan loans in October, down sharply from September and falling short of analysts' expectations, according to data released by the People's Bank of China (PBOC).

Economists polled by Reuters had predicted a fall in new yuan loans to 700 billion yuan last month from 1.59 trillion yuan the previous month and against 738.4 billion yuan a year earlier.

"Corporate financing demand remains weak due to poor profitability," said Luo Yunfeng, an economist at Huaxin Securities. "Credit demand may not pick up soon despite recent central bank policy measures."

The PBOC does not provide monthly breakdowns but Reuters calculated the October figures based on the bank's Jan-October data released on Monday, compared with the Jan-September figure.

The PBOC said new yuan loans totaled 16.52 trillion yuan for the first ten months of the year.

Household loans, including mortgages, dropped to 160 billion yuan in October from 500 billion yuan in September, while corporate loans dipped to 130 billion yuan from 1.49 trillion yuan, according to Reuters calculations based on central bank data.

Chinese policymakers have been working to arrest further weakness in an economy stuttering in recent months from a prolonged property market downturn and swelling local government debt.

Among their goals is to tackle the side-effects from a mountain of debt left from previous stimulus dating back to the 2008-2009 global financial crisis.

China's central bank governor Pan Gongsheng said China will step up counter-cyclical adjustment and affirm a supportive monetary policy stance, a central bank statement showed on Monday, citing a report Pan delivered to the top legislative body last week.

In late September, the central bank unveiled an aggressive stimulus package including rate cuts, and Chinese leaders pledged "necessary fiscal spending" to bring the economy back on track to meet a growth target of about 5%.

MORE STEPS ON THE CARDS

China unveiled a 10 trillion yuan debt package on Friday to ease local government financing strains and stabilize flagging economic growth, as it faces fresh pressure from the re-election of Donald Trump as US president.

New measures planned will include sovereign bonds issuance to replenish the coffers of big state banks, and policies to support purchase of idle land and unsold flats from developers, Finance Minister Lan Foan said.

Analysts at OCBC Bank expect the central bank to deliver another cut in banks' reserve requirement ratio in November or December to support the planned bond issuance.

China watchers are skeptical the steps will produce a near-term boost in economic activity as most of the fresh funds will be used to reduce local government debt, but China's central bank said it will continue supportive monetary policy to create a favorable monetary and financial environment for economic growth.

The PBOC also said it will study and revise money supply statistics to better reflect the real situation of the country's money supply.

Trump's election win could also prompt a stronger fiscal package in expectations of more economic headwinds for China. Trump threatened tariffs in excess of 60% on US imports of Chinese goods, rattling China's industrial complex.

Broad M2 money supply grew 7.5% from a year earlier, central bank data showed, above analysts' forecast of 6.9% in the Reuters poll. M2 grew 6.8% in September from a year ago.

Outstanding yuan loans grew 8.0% in October from a year earlier. Analysts had expected 8.1% growth, the same pace as in September.

The outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to a record low of 7.8% in October, from 8.0% in September. Acceleration in government bond issuance could help boost growth in TSF.

TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies, and bond sales.

In October, TSF fell to 1.4 trillion yuan from 3.76 trillion yuan in September. Analysts polled by Reuters had expected TSF of 1.55 trillion yuan.