Persian Gulf Stocks Slide as Prospect of Trump Victory Spurs Selloff

EghtesadOnline: Most Persian Gulf stocks declined, tracking losses in emerging markets as investors priced a higher chance of victory for Donald Trump in the U.S. presidential election.

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06 November 2016

Abu Dhabi’s ADX General Index led the retreat, falling 0.9 percent as of 10:43 a.m. local time. Dubai’s DFM General Index and Qatar’s QE Index both dropped 0.7 percent, while Oman’s MSM 30 Index was little changed. Kuwait’s SE Price Index added 0.1 percent and Bahrain’s BB All Share Index rose 0.2 percent, reports Bloomberg.

As election day approaches in the U.S., the lack of a clear leader in polls has raised the specter of protracted battles in swing states and market disruption if Trump prevails. The Republican candidate has pledged to review trade deals and crack down on immigration, which are seen as negative for several developing economies. The MSCI Emerging Markets Index of equities fell for a fourth day on Friday.

“In the short-term a Trump victory will likely be negative for emerging markets,” said Mohamad Al Hajj, a Dubai-based equity strategist for the Middle East and North Africa at EFG-Hermes U.A.E. Ltd. If he wins it will probably lead “to outflows from global emerging-market funds, which in turn could impact benchmark countries in the Middle East, such as the United Arab Emirates and Qatar,” he said.

Meanwhile, Egyptian stocks should continue to have their own momentum regardless of U.S. election, Al Rajj said. The EGX 30 Index ralliedon Nov. 3 after the country’s central bank said it would allow the nation’s currency to float.