Review: COVID-19, low oil price dragged most GCC indices into red in 2020 | ZAWYA MENA Edition
GCC markets under performed their global peers and ended 2020 mixed, according to the GCC Markets Monthly Report by Kamco Invest.
Nearly all the markets remained in the red for most of the year due to the impact of Covid-19 and the decline in crude oil prices since March 2020.
Global crude prices lost more than a fifth of their value in 2020, as lockdowns to combat COVID-19 depressed economic activity and sent oil markets reeling. On the last trading day of 2020, Brent rose 17 cents to settle at $51.80 a barrel.
However, by year-end, two out of the seven exchanges in the GCC closed in the green led by gradual gains following the steep declines in Q1.
The aggregate MSCI GCC index reported a yearly decline for the first time in five years due to the twin shocks. On one hand, governments had to impose coronavirus-related restrictions that had a severe impact on the economic front; the IMF expects a 2.7 percent decline in GDP rates for the GCC region. On the other hand, the decline in demand for crude oil, the biggest revenue source for the GCC governments, resulted in prices hitting a three-decade low during the year.
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