Kuwait: December 11, 2016
The Saudi Tadawul All Share Index was the best performing GCC index for the month, as it added 16.4%, and continued to build on gains seen in October, following the $17.5 billion foreign bond sale, which provided a big boost to liquidity and fueled expectations of a broader economic activity stimulus
- Trump moves market after an unforeseen win
- OPEC cuts production, sending prices soaring
- Saudi Arabia’s Tadawul rallies 16.4%
- Egypt floats currency; market rallies 36.6%
At its November 30 meeting, OPEC surprised the markets by announcing a 6-month deal to reduce its output to 32.5 million barrels per day, a cap on Iranian production, and a presumed commitment by non-OPEC members to also cut production. Though some details on implementation and compliance are still missing, the agreement is clearly a serious effort by OPEC to rein in global crude supplies—and the markets certainly reacted favorably to the deal. They pushed Brent well above $50 per barrel ($/bbl), a level that has been hard to sustain so far this year. The GCC equity markets were, of course, helped by the news and rose in the aftermath. It was also good news for US shale producers, and for major central banks trying to shore up inflation.
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