Saudi bourse gains amid strong oil prices; Egypt falls

On Sunday, the Saudi stock market recovered from two days of losses to close higher, but the Egyptian bourse continued its slide due to mounting inflation fears.

Gains in Retal Urban Development Co. contributed to a 0.6% increase in the Saudi Arabian benchmark index (.TASI) (4322.SE).

Optimism among Saudi Arabian investors has risen, which might lead to more increases for the stock market this week. According to Ahmed Negm, Head of Market Research MENA at XS.com, the main index has risen beyond the top it reached earlier this year, giving investors a significant incentive to purchase.

Yet, “the prospect for increased oil prices in the short to medium term might provide assistance for the local economy.”

Key to the Gulf’s financial markets, oil prices remained mostly unchanged on Thursday but notched a third weekly rise as markets assessed the impact of OPEC+’s planned production cutbacks and declining U.S. oil stocks against concerns about the global economy.

Industries Qatar (IQCD.QA), a manufacturer of petrochemicals, had its stock price decrease by 1%, contributing to a 1% decline in the broader index (.QSI) in Qatar.

World Bank’s newest update, announced on Thursday, reduced its economic growth outlook for the six-member Gulf Cooperation Council (GCC) oil producers from 3.7% in October to 3.2% in 2023.

The surplus is projected to fall from 4.3% of GDP in 2022 to 3.2% in 2023 in the GCC.

The blue-chip Egyptian index (.EGX30) was down 0.2% outside of the Gulf.

As Egypt is still under financial and economic pressures, the Egyptian market may witness more losses, as predicted by Negm.

“At the same time, foreign investors may continue their selling trend as appetite for risk declines.”

While the lack of foreign currency persists after almost a year of devaluations of the Egyptian pound, Egypt’s headline inflation rate is expected to reach an all-time high in March, a Reuters poll indicated on Thursday.