Saudi leads GCC equities rebound in August, but Oman still the top performer year-to-date

GCC equities bounce back in August: The MSCI GCC index, which tracks big and mid cap equities, rose 3.9% in August after a three-month losing streak as regional geopolitical tensions eased, according to Kamco Invest’s monthly report (pdf). The rally tracked a broader global rebound: the MSCI World Index gained 2.6% on a healthy earnings season.

Saudi Arabia did the heavy lifting: The Tadawul All Share Index rose 5.1% — its best month since January — after four consecutive monthly declines, pushing YTD returns to 6.1%. Oman’s MSX 30 came next at a 4.5% increase, followed by Kuwait’s All Share Index (+1.6%). Abu Dhabi added 0.9% and Dubai 0.7%. Meanwhile, Qatar (-1.1%) and Bahrain (-1.0%) were the only markets to close the month lower.

The rally was broad-based across sectors, led by hotels and leisure (+10%), materials (+8.2%), and ins. (+7.5%). Telecom rose 5.0% and banking 4.7% — the region’s most heavily weighted sectors. One outlier: energy stocks, despite elevated and volatile oil prices tied to the closure of the Strait of Hormuz, gained just 1.2% — the weakest of any sector.

But the YTD scorecard tells a different story: Oman is the region’s best-performing market by a wide margin, up 29.6% year-to-date (YTD) on the strength of solid performances in February (+16.8%) and March (+10.5%). Saudi came second with a 6.1% surge, followed by the distant third Abu Dhabi(+0.1%). The rest of the markets remain at a worse place than when they started the year, with Qatar down by 8.9%, Bahrain by 6.3%, and Dubai declining by 3.5%.

And it gets complicated in some jurisdictions when you break down the performance by cap size. In Kuwait, the Main 50 Index, the mid-cap benchmark, gained 9.3% in August, its second-best month of the year, and is up 26.6% YTD, while the large-cap Premier Market Index rose by just 0.8% in August and is down 2.2% YTD.