The Month That Was - MENA Markets Positive, as OPEC agrees to cuts

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Oil price climbed 4.5% to USD 50.47 per barrel, as OPEC members agreed on production cuts to stabilize the oil markets. The deal to cut production,.....

Summary

  • Oil price climbed 4.5% to USD 50.47 per barrel, as OPEC members agreed on production cuts to stabilize the oil markets. The deal to cut production, a first since 2008, will lead to OPEC members shedding 1.5mn barrels per day for the next six months.
  • S&P GCC closed November almost 8% higher than the previous month, primarily due to heavyweight Saudi Arabia’s Tadawul index (TASI) rising 16.4% in the month. 
  • The IMF sanctioning a three-year loan, worth USD 12bn, buoyed Egypt’s economy, as the government began to implement tough economic reforms and news measures on the currency exchange rate.
  • Kuwait weighted and price indices had a positive month, climbing 3.7 per cent and 2.8 per cent respectively. As on date, the Kuwaiti indices are still in the red column in 2016, along with Qatar and Bahrain, while the Dubai index has recovered to register a growth of 6.7%.
  • The US elections concluded in November, with Donald Trump emerging victorious, which sent global markets in a tizzy. The governments in the Gulf region are watching the developments closely, as the President-Elect had proposed revisiting bilateral treaties and trade commitments during a fraught campaign.
  • Analysts continue to doubt whether the OPEC deal would be successfully implemented, as rise in production in the US would continue to widen the demand-supply gap. This is worrisome for Gulf oil exporters, as the President-Elect Trump had proposed to maximize domestic production and accelerate exploration programs. 
  • Global equities had a positive month, with S&P 500 rising 3.4%, while Eurozone markets were mixed, as inflation rose to highest in over two years. China's manufacturing sector pressures eased, after economic numbers indicated improvement.

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The Month That Was - MENA Markets Positive, as OPEC agrees to cuts

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