Markets in the MENA region witnessed an unexpected calm, exhibiting little volatility despite the unsuccessful OPEC meeting in Doha last week, according to the weekly investment report published by Al Masah Capital Limited (AMCL), a UAE-based alternative asset management advisory firm.
“Market observers were expecting a roller coaster after the collapse of the Doha talks where OPEC members failed to agree on a freeze in production to mitigate falling oil prices, but instead saw an opposite reaction. The fact that oil climbed back over $40 after a brief selloff also surprised investors as most were getting ready for a strong selloff in equities,” the report highlighted.
The unexpected market reaction to what can be considered negative news and a subdued reaction by buyers contributed to a mild week in movement. The weekly average gain of 1.5% was mostly led by a 4% gain in Egypt followed by Abu Dhabi with 2.2% and Qatar with 1.5%. By surprisingly contributing another positive week, April now sits pretty with one more week of trading left and in a seemingly strong position to add to the February and March gains and further solidify this mini rally in the first half of the year.
Buyers are certainly more emboldened and willing to stand up to selling pressure. If oil continues its uptick above $40, then regional markets can look to chart a further path upwards. However, caution is still recommended as the oversupply picture for oil has not changed in a material way.