Stocks in the six-nation Gulf Cooperation Council declined for a third straight quarter as equities failed to fully recover from oil’s plunge in January.
The Bloomberg GCC 200 Index, which tracks the region’s 200 biggest companies, gained 0.3 percent at the close, paring its three-month decline to 3.6 percent. The gauge’s quarterly losing streak is the longest in more than four years. While Saudi Arabia’s Tadawul All Share Index’s 10 percent loss this year is the biggest among major local indexes across the Gulf, Dubai’s DFM General Index’s 6.5 percent gain is the steepest advance.
Oil’s decline in January to the weakest level since 2003 put a strain on government finances in the Gulf, where crude sales are the largest source of revenue, sending the region’s stocks tumbling to a five-year low. While equities have since recovered some losses along with oil, crude prices are still about 30 percent cheaper than they were a year earlier. The region is home to almost a third of the world’s proven oil reserves.
“Investors have already priced in the drop in oil prices and the next catalyst for the markets will be OPEC’s meeting in April,” Tariq Qaqish, the Dubai-based head of asset management at Al Mal Capital PSC, said by phone. “I don’t see a significant risk to the markets from here.”
Members and non-members of the Organization of Petroleum Exporting Countries will hold talks in Doha on April 17 to discuss a possible freeze in production to stabilize global markets. Brent crude rose 0.9 percent to $39.60 a barrel as of 1:56 p.m. in London on Thursday.
The BGCC 200 rose for two straight months, lifting the index above its 50- and 100-day moving averages in March for the first time since July. Saudi Basic Industries Corp., one of the world’s biggest petrochemicals manufacturers and the company with the largest weighting on the index, is down 3.6 percent this year.
Saudi Arabia’s Tadawul rose 0.1 percent and the ADX General Index in Abu Dhabi fell 0.1 percent on Wednesday. Dubai’s DFM General Index advanced 0.9 percent, while Kuwait’s SE Price Index and the Bahrain Bourse All Share Index lost 0.5 percent and 0.8 percent, respectively. Qatar’s QE Index gained 0.6 percent and the MSM30 Index in Muscat was little changed.