Arab Financial Markets Flourish in 2023: A Year of Growth and Resilience
In the realm of Arab financial markets, the year 2023 proved to be a rollercoaster ride of ups and downs, ultimately culminating in remarkable developments and positive outcomes. The annual report issued by the Union of Arab Securities Authorities shed light on several key points that shaped the financial landscape in the region.
One of the standout features of the year was the significant growth in traded stock prices across regional markets, particularly in the last two months of the previous year. This surge was fueled by expectations of interest rate reductions in 2024, as central banks responded to easing inflationary pressures worldwide.
Global and regional markets both saw gains exceeding 10% throughout 2023, reflecting growing confidence in decision-makers’ vision and their ability to implement policies that mitigate economic downturns. Arab financial markets, especially in Gulf countries, attracted additional capital through successful offerings, stimulating trading activity and bolstering overall performance.
However, the year did not come without its challenges. Arab markets faced a shaky start, with a notable decline in the Arab Standard & Poor’s Composite Index in February. The downturn at the beginning of the year extended beyond Arab markets, impacting global counterparts as concerns over the US Federal Reserve’s monetary policy contributed to market volatility.
Despite severe losses in stocks and financial bonds globally, regional markets showed resilience, managing a slight increase in stock prices during the third week of the current month. The year ended on a positive note, with impressive performance gains in November and December, driven by expectations of peaking interest rates and a slowdown in US inflation rates.
Market capitalization in Arab stock markets reached $4.5 trillion by the end of December 2023, marking a 12.2% increase from the previous year. The surge was led by the “Tadawul” market in Saudi Arabia, which saw a 14% rise to reach $3.002 trillion in 2023.
The Egyptian Exchange witnessed substantial growth, with traded stocks recording a remarkable 95.8% rise, reaching $110.7 billion and accounting for approximately 17% of the total trading value in the region. The Morgan Stanley MSCI Emerging Markets Index highlighted the Egyptian stock exchange’s impressive performance, showing a 41.8% improvement during the past year.
Morocco and Lebanon also saw significant improvements in their market performance, with Morocco’s index rising by 22.8% and Lebanon’s index closing the year with an impressive increase of 47.4%.
The report also highlighted the sector breakdown in the region, with the energy sector holding the largest share of market capitalization, followed by the financial, consumer, and basic materials sectors.
Overall, 2023 was a year of growth, resilience, and positive outcomes for Arab financial markets, showcasing the region’s ability to navigate challenges and capitalize on opportunities for economic prosperity.
