Gulf stock markets in Saudi Arabia, the Emirates, and Qatar have seen significant declines since the beginning of the year. The Qatar Stock Exchange index lost 14%, the Abu Dhabi Stock Exchange index declined by 7.50%, the Saudi Stock Exchange index by 3.90%, and the Dubai Stock Exchange index by 2%. On the other hand, the Muscat Stock Exchange showed gains, with the Muscat Stock Exchange index rising by 7.3%, Bahrain by 3.4%, and Kuwait by 2.7% in the first five months of 2024, according to Kamco Invest’s monthly report on Gulf Cooperation Council countries’ stock market performance in May 2024.
The Dubai market maintained its leading position in terms of price-to-earnings multiples among major markets, with a multiple of 7.8 times. The Gulf market’s profitability multiple reached 17 times overall, with the lowest in Bahrain at 7.8 times, followed by Qatar at 10.5 times, Kuwait and Muscat at 12.9 times each, Abu Dhabi at 17.8 times, and Saudi at 19.9 times.
The P/E ratio is a classic measure of a stock or index’s value, indicating the number of years of earnings it takes to recover an investment. The current return in Dubai and Bahrain led at 6% and 8.2% respectively, with lower returns in Oman, Qatar, Saudi Arabia, Kuwait, and Abu Dhabi.
Geopolitical issues and a decline in crude oil prices led to a third consecutive monthly decline in the Gulf stock market index in May 2024. The Morgan Stanley Gulf Index saw its largest decline in 17 months, losing 6.4% of its value. Saudi Arabia recorded the largest decline at 7.2%, followed by Dubai and Qatar at over 4%.
The performance of sector indices also declined sharply in May 2024, with nine out of ten sectors recording losses. The industrial sector index and healthcare sector index saw significant declines, while the Dubai Financial Market fell by 4.3%. The Kuwait Stock Exchange remained stable, with mixed performance in sectoral indices.
The Qatar Stock Exchange declined for the third consecutive month in May 2024, while the Bahrain Stock Exchange saw a modest increase of 0.5%. The Muscat Market 30 Index recorded the largest monthly gains in the Gulf markets, rising by 1.3%. Throughout these fluctuations, investors monitored geopolitical issues, oil prices, US interest rates, and consumer confidence, influencing stock market performance in the region.