Egypt leads 2022 gains, Saudi marks first annual loss in 7 years

Saudi woman walks at the Saudi stock market (Tadawul), in Riyadh
Saudi woman walks at the Saudi stock market (Tadawul), in Riyadh, Saudi Arabia March 9, 2020. REUTERS/Ahmed Yosri

Dec 29 (Reuters) - The Saudi Arabian stock market ended lower on Wednesday, marking its first annual loss in seven years, while the Egyptian bourse was the Middle East's best performer in 2022.

Saudi Arabia's benchmark index (.TASI) eased 0.1%, hit by a 1.1% fall in Al Rajhi Bank (1120.SE).

The index, which hit its highest level in nearly 17 years in early May, finished the year down 7.1% at a near 20-month low.

According to Wael Makarem, senior market strategist – MENA at Exness, stock markets have witnessed a difficult period in 2022 as inflation, rising interest rates and the war in Ukraine strongly impacted investor sentiment.

Most Gulf Cooperation Council countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the U.S. dollar and follow the Federal Reserve's policy moves closely, exposing the region to a direct impact from monetary tightening in the world's largest economy.

The kingdom's largest lender, Saudi National Bank (1180.SE), finished 1.2% higher. It has, however, lost more than $15 billion in market value since Oct. 27 after committing to invest up to 1.5 billion Swiss francs ($1.62 billion) in embattled Swiss bank Credit Suisse Group (CSGN.S).

Oil behemoth Saudi Aramco (2222.SE), which surpassed Apple Inc (AAPL.O) to become the world's biggest company in May, gave up those gains to end the year around where it started, with year-to-date losses at 1.4%.

The benchmark index (.QSI) of Qatar, among the world's top exporters of liquefied natural gas, dropped 1.1%.

The index posted its first yearly loss since 2017, dropping 8.1%.

Makarem said the Ukraine war has created strong volatility in energy prices which in turn affected economies around the globe and the performance of companies in various sectors from transport to retail.

"The fear of an economic slowdown has gripped markets throughout the year and could extend to 2023 as a recession remains possible."

Oil prices - a key catalyst for the Gulf's financial markets - surged 80% earlier this year before giving up most gains.

Kuwait stocks (.BKP) recorded year-to-date gains of 6.5%, while Oman (.MSX30) was up 17.6%.

Elsewhere, the Bahraini index (.BAX) finished the year 5.5% higher.

Outside the Gulf, Egypt's blue-chip index (.EGX30) edged 0.1% higher, posting yearly gains of 22%.

The Egyptian stock market reversed earlier losses to gain in the final quarter following a deal with the International Monetary Fund and central bank support to allow lenders greater flexibility in currency trading.

($1 = 3.7600 riyals)

($1 = 0.9236 Swiss francs)

Reporting by Ateeq Shariff in Bengaluru; Editing by Devika Syamnath

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