Wednesday, 4 January 2023

Mideast Stocks: Gulf stocks slide on weaker oil and PMI data

Mideast Stocks: Gulf stocks slide on weaker oil and PMI data

Major Gulf stock markets ended the New Year rally on Wednesday, with Saudi Arabia falling the most as worries about a global economic downturn and weaker oil prices sapped risk appetite.

Growth in the non-oil private sector in the United Arab Emirates slowed in December. The seasonally adjusted S&P Global UAE Purchasing Managers' Index fell to 54.2 in December from 54.4 in November, while the seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index fell to 56.9 in December from 58.5 in November.

Oil price, which fuels the region's growth, fell sharply on Wednesday after slumping in the previous session. Daniel Takieddine, CEO MENA at BDSwiss, said weaker demand for oil could be the centre of attention as China struggles with COVID restrictions while manufacturing activities in the United States and China continue to decline at a steady pace.

Saudi Arabia's benchmark stock index fell 1.2% to end a three-day rally, with Retal Urban Development Company shedding 1.9% and Al Rajhi Bank declining 1.4%. State oil giant Saudi Aramco was down 1.6%. Aramco may cut the official selling price for the medium sour grade by about $1.50 a barrel in February, dragging the February Arab Light price to a level last seen in November 2021.

Abu Dhabi's index retreated 0.1%, pressured by a 0.5% decline in the country's largest lender First Abu Dhabi Bank. The benchmark stock index of Qatar, among the world's top exporters of liquefied natural gas, declined 0.6%, led by financial and industrial stocks. Commercial Bank dived 3.5% and petrochemical maker Industries Qatar was down 1.3%.

Dubai's index, however, ended flat. Emirates NBD Bank rose 1.2% after Dubai's largest lender mandated banks to arrange a three-year fixed rate UAE dirham-denominated bond. Blue-chip developer Emaar Properties was down 0.6%.

Outside the Gulf, Egypt's blue-chip index climbed 3.3%, extending gains to a fifth session, as 25 of the 30 constituent stocks moved in positive territory.

The Egyptian pound weakened to 26.49 to the dollar, marking its biggest one-day move since the central bank allowed it to fall by 14.5% on Oct. 27, according to Refinitiv Data.

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