Global equity markets ended 2024 on a positive note, marking the second consecutive year of gains, according to a report by Kamco Invest. The broad-based performance saw notable surges across major global markets. However, GCC markets underperformed relative to global indices due to regional-specific challenges and international economic factors.
At the global level, equity markets in the US, Germany, Japan, and Hong Kong recorded double-digit gains. In contrast, key emerging markets such as Brazil, Mexico, and South Korea reported declines. Asian markets, including India and China, posted mid-single-digit gains, aligning with the overall European index.
Despite global gains, the MSCI GCC index rose by only 0.7% in 2024, reflecting mixed performances at the country level:
- Dubai: The standout performer in the GCC with a 27.1% surge.
- Kuwait: Achieved an 8% gain.
- Saudi Arabia: Closed with a marginal 0.6% increase after a volatile year.
- Oman: Recorded a 1.4% gain.
- Bahrain: Posted a 0.7% gain.
- Qatar: Declined by 2.4%.
- Abu Dhabi: Fell by 1.7%.
Factors affecting GCC performance
Kamco Invest attributed the underperformance of GCC markets to a combination of regional geopolitical tensions and global economic developments:
- Geopolitical conflicts: The ongoing conflict in the Middle East disrupted regional trade and commodity flows.
- Economic headwinds: Interest rate hikes and inflationary pressures further dampened market sentiment.
Despite these challenges, the region maintained strong fundamentals, with robust non-oil sector growth and a $3.5 trillion project pipeline supporting long-term economic stability.
Investor sentiment
Foreign investors were net buyers of GCC stocks throughout the year, contrasting trends in other emerging markets, where foreign outflows were more prevalent. Despite market volatility, this indicated sustained investor confidence in the GCC’s economic prospects.
Significant events, including the Russia-Ukraine war and resulting sanctions on Russia, influenced the global market performance. The eurozone’s sluggish growth also affected investor sentiment in Europe. In China, economic recovery efforts were hampered by weak domestic demand, though government interventions toward the end of the year provided some market support.
The report highlights the GCC’s resilience in global and regional challenges. While 2024 saw subdued gains for GCC markets relative to global indices, ongoing investments in infrastructure and economic diversification may bolster future performance. However, the report also highlighted the importance of stabilising regional geopolitical tensions to foster stronger investor confidence in the coming year.
