Stocks in the energy-rich Gulf have been left out of the latest rally in emerging markets, as falling oil prices, a weaker dollar and China’s reopening send investors hunting for deals elsewhere.
Gulf stocks diverged when their emerging-market peers began to take off in November, with the MSCI Emerging-Market Index rising 20% as of Monday. The MSCI GCC Countries Combined Index lost 10% over the same period.
That’s a stark reversal from the two preceding years, when the Gulf index soared nearly 50% as emerging markets slumped. Banks in Saudi Arabia, the region’s largest market, are among sectors lagging in 2023, weighing on the benchmark Tadawul All Share Index, where financial firms make up nearly 40% of the gauge.
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