The Gulf Stock Market Rising and Falling: An Analysis of Profitability Multiple and P/E Ratio

In the first five months of 2024, Gulf stock markets in Saudi Arabia, the Emirates, and Qatar experienced significant declines, while Muscat’s market showed gains. The Qatar Stock Exchange index lost 14%, and the Abu Dhabi Stock Exchange index declined by 7.50%. The Saudi Stock Exchange index fell by 3.90%, and the Dubai Stock Exchange index dropped by 2%. However, Bahrain recorded a rise of 3.4%, Kuwait gained 2.7%, and Oman’s market remained stable.

The Dubai market maintained its leading position in terms of price-to-earnings multiples among major markets, with a multiple of 7.8 times. The Gulf market’s profitability multiple reached an overall high of 19.9 times in Saudi Arabia, while Bahrain recorded the lowest at 7.8 times, followed by Qatar at 10.5 times and Kuwait at 12.9 times each, Abu Dhabi at 17.8 times and Muscat at 12.9 times each.

The P/E ratio is a classic measure of a stock or index’s value, indicating how many years of earnings it takes to recover an investment. Current returns led in Dubai and Bahrain at an impressive rate of