26/06/2016 06:08 AST
Along with its peers in the region, the Muscat Securities Market made marginal gains on Thursday, one day before Britain voted to stay out the European Union. But for the world stock markets, it was a black Friday with a loss of about $2 trillion in value. Europe faced the worst. London’s FTSE dropped 3.2 per cent, Frankfurt and Paris each fell 7 per cent to 8 per cent. The Wall Street traded down more than 3 per cent, with the Dow Jones industrial average dropping as much as 655 points, its worst daily drop in 10 months. Oil prices slumped around 5 per cent amid fears of a broader economic slowdown that could reduce demand.
Across the Atlantic, investors were pricing in less chance of another hike in US interest rates given the Federal Reserve had cited a British exit from the EU as one reason to be cautious on tightening. The Brexit vote also sent reverberations through Asian markets on Friday, where investors were the first to react as it became clear a shock result was in the offing. Stocks in Japan suffered their worst day in five years with Nikkei closing 7.9 down. Analysts at S&P Global Ratings, however, believe that Brexit could paralyse capital investment for UK and European corporates.
“In our view, the shorter term challenges relate mostly to the dislocation that would be caused by increased financial market volatility, including a potential sharp depreciation in sterling,” said S&P Global Ratings analyst Taron Wade. In the Gulf region, except for Dubai and Kuwait, all markets made gains amid low volumes on Thursday, the last day of trading in the week. But analysts at local brokerage house say uncertainties arising out of the Brexit outcome may dictate the market trend over the short-term.
“As a result of Britain’s exit from the European Union, the impact on the local bourse will be temporary. But the equity risk premium will rise across the region”, said Suresh Kumar, head of research at Al Maha Financial Services. Despite anticipating less impact to the local and the GCC markets, risk aversion trend is expected among investors. In a trading dominated by block deals the benchmark MSM30 Index ended the day higher by 0.14 per cent to close at 5,796.93 points. The MSM30 Index market capitalisation as at the end of the day stood at RO 6.384 billion. MSM Shariah Index gained 0.25 per cent to close at 885.07 points.
Global Financial Investment was the most active in terms of volume and turnover. Al Izz Bank was the top gainer, up 1.72 per cent while DBIH was the top loser, down 9.78 per cent. The Industry Index ended the day higher by 17 points, while the Services Index ended the day up by one point. A total of 25.735 million shares got traded during the day amounting to aggregate turnover of RO 4.035 million GCC and Foreign investors ended the day as net sellers to an extent of RO 358,000 and RO 28,000 respectively. Omani investors emerged as net buyers to an extent of RO 391,000.
In Saudi Arabia, the main stock index closed up 0.3 per cent with much activity focusing on insurance stocks. The sector’s sub-index added 0.6 per cent while the telecommunications sector rose 0.4 per cent.
In Abu Dhabi, the index edged up 0.04 per cent. Kuwait’s main index slipped 0.02 per cent. In Egypt, Telecom Egypt added 0.2 per cent after a telecommunications industry source told Reuters that new 4G licenses and other reforms issued by the sector’s regulators, announced earlier this week, would not require TE to sell its 45 per cent stake in Vodafone Egypt.
Oman Daily Observer
Please wait...
