A look at global markets in H1 2022; TASI ranks 24th globally, 10th in Arab world

In this report, Argaam highlights the performance of global stock markets in the first half of 2022, covering almost 106 indexes, 30 of which rose and 76 declined.

The decline in most indices was due to the selling pressures the global markets are still witnessing, in light of geopolitical worries and tensions from the Russian-Ukrainian war and its negative impact on inflation rates. There are further expectations of entering a phase of stagflation that may last a long time, weak global economic growth, and a potential US recession.

The stock markets were affected by several other factors, mainly the central banks' moves to curb the higher inflation rates that exceeded the ranges set by the banks, in addition to freezing the quantitative easing programs and stopping money flow into markets.

The report captures the most important economic events that directly affected global markets in H1 2022, including:

The US Federal Reserve: The US central bank hiked the interest rates three times by 150 basis points (bps) since the beginning of 2022, to reach 1.75% by the end of June 2022, in an attempt to control inflation rates, which reached 9.1% compared with a year earlier.

Treasury yields: The treasury yields for most economies rose significantly, as the US treasury yields increased by almost 150 bps in H1 2022, their highest level since 1994.

US dollar: The US dollar index continued its uptrend to reach record levels, amid the Fed’s forecasts of raising the interest rates by nearly five or six times in 2022, which may negatively impact the stock markets’ performance as investors tend to keep the dollar.

Oil: Oil prices jumped by about 48% to $114.81 a barrel in the six-month period, driven mainly by supply cutbacks on the back of geopolitical tensions.

As for stock markets, the MOEX Russia Index was the worst performer, diving 42% in H1 2022, affected mainly by the war and political conflict with Ukraine, in addition to the international sanctions against Russia, including the isolation of Russian banks from the global financial system, and freezing the Central Bank of Russia’s assets, in order to prevent the country from tapping its foreign exchange reserves amounting to $630 billion.

Meanwhile, Sri Lanka Stock Market Colombo All-Share Index came in second, plunging 40% to 7,342 points, as the economy reached the stage of collapse and the government declared bankruptcy after failing to pay its foreign debts reaching $51 billion in April 2022.

The Nasdaq-100 Index took the fifth position, dropping 30% amid increasing concerns about the Federal Reserve and its measures to control inflation that negatively impacts the US economic recovery.

Egypt’s EGX 30 ranked 13th, falling 23% to 9,226 points in H1 2022, hurt by the exit of foreign investments, worries about the pound depreciation, increase in the cost of debt, and continued rise in inflation rates.

On the other hand, Zimbabwe’s ZSE All Share was the best performer, soaring 90% since the beginning of the year. The list of top performers included six Arab countries, as Lebanon’s Beirut Stock Index came in second with a rise of 41%, and Amman Stock Exchange General Index (17%).

Abu Dhabi’s FTSE ADX General Index was the ninth top performer, rising 10%, while Boursa Kuwait ranked 13th, advancing 8%.

The following table indicates the performance of Arab and GCC stock markets in H1 2022:

The following table illustrates the performance of some global indices in H1 2022: