October and November, historically the weakest two months of the year for GCC equity markets, are now behind us. October managed to buck the seasonal headwinds with all markets apart from Saudi rising in value. November, however, conformed to historical tendencies with most markets falling in value.
Going into December there doesn't appear to be any prominent seasonal tendencies. Apart from the Qatar market that is. As can be seen in the chart below, the average daily change for the QE Index in December is nearly 0.40%. That's the largest historical average daily return of any market for any month.
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In fact, as the chart below shows, if you had only invested in the Qatar market during the month of December from 2004 to 2009 and sat out the other eleven months of the year, you would have made a cumulative return of 47%. That's pretty good given that a buy and hold strategy would have returned just 29% over the same time period.
So, the historical tendency for the Qatar market to rise in value during December has been pretty strong. However, a word of caution. We're dealing with a very small data sample when it comes to testing seasonality (my data goes back to the beginning of 2004). So, these results should be taken with more than a pinch of salt.
That said, with the Qatar market displaying such strong performance over the last six months, plus the recent 2022 World Cup announcement, it'll be interesting to see if the bullish December tendencies materialise this year.
Enjoy.
