Mideast Stocks: Gulf stocks track global markets lower on oil volatility, US debt impasse
Most Gulf stock markets ended lower on Tuesday, mirroring a decline in its global peers as volatile energy prices and an impasse over US debt ceiling weighed on sentiment.
Oil prices — a key catalyst for gulf's financial markets — rose in choppy trade on optimism the U.S. would avoid a debt default, a tighter market outlook and a warning from the Saudi energy minister to speculators that raised the prospect of further OPEC+ cuts to support the market. Brent crude was up 89 cents, or 1.2%, at $76.88 a barrel by 1218 GMT.
GCC stock markets reacted to the developments and risks on the global and local stages as U.S. debt ceiling negotiations and energy price uncertainty continued to weigh on traders' sentiment, said Gabi Dahduh, senior manager at CAPEX.com MENA.
Saudi Arabia's benchmark index fell 0.5%, extending losses for a third straight session, with almost all the financial stocks in negative territory including Riyad Bank and Al Rajhi Bank, Saudi Arabia's second-largest lender by assets, dropping 3.4% and 0.5%, respectively. Abdulmohsen Al-Hokair Group dropped 1.8%, after its quarterly losses widened to 34.34 million riyals ($9.16 million), while revenue from almost all the segments decreased.
Dubai's main share index was down 0.5% on declines in property and banking stocks, with blue-chip developer Emaar Properties decreasing 2.2% and Dubai Islamic Bank , dropping more than 1%. Abu Dhabi's benchmark index closed 0.4% lower, on First Abu Dhabi Bank, the United Arab Emirates' biggest lender, sliding 1.2% and conglomerate Alpha Dhabi dropping 3%.
Qatar shares ended lower for a second straight session, easing 0.3%, with index heavyweight Qatar Islamic Bank shedding 1.4% and Qatar National Bank, the Gulf's biggest lender, declining 1.1%.
Outside the Gulf, Egypt's blue-chip index edged up 0.1%, led by a 1.5% rise in electronic payments provider Fawry and 4.7% surge in Oriental Weavers Carpet Co.
Clock Is Ticking for Qatar to Sell Its LNG - Bloomberg
Qatar needs to sell a massive amount of liquefied natural gas into a market that in a few years could be oversupplied.
The world’s top exporter shocked the industry a few years ago by announcing a 60% boost in production through 2027. It was a classic move to grab market share and elbow out rivals in the US and Australia.
Since then, Qatar has found only a few buyers for the new supplies.
Part of the problem is timing. The world needs LNG now, but not so much from the middle of the decade when the start of the projects is likely to coincide with those in the US and several other places. That means buyers aren’t in any rush to sign long-term agreements with Qatar as they seek to negotiate lower rates.
Qatar's QIA says has been very active in public and private credit | Reuters
Qatar Investment Authority has been very active in private and public credit over the past two years, CEO Mansoor Ebrahim Al-Mahmoud said on Tuesday.
"Companies that have been feeling the tide, they have a good business models but they have an issue with their balance sheet because of this acceleration of hikes of interest rates," al-Mahmoud told an audience at the Qatar Economic Forum, organised by Bloomberg.
"So normally institutions like us, which are very liquid, very long term, have a risk appetite in these types of investment. I would advise that for the next maybe one year, the credit space would be an interesting space to deploy some investment," al-Mahmoud said.
The $445 billion sovereign wealth fund is examining AI as a theme of investments and sees it as a "wonderful technology" in some applications, he added.
Bankers See More Asia, Middle East Dual Listings Like Olam in Singapore, Saudi - Bloomberg
Dual listings between the Middle East and Asia are expected to become a new trend as investment flows between the two regions rise, according to bankers.
The first such deal is already in the works. Olam Group Ltd., one of Asia’s biggest commodity traders, is planning to list its agribusiness unit in its home market of Singapore as well as Saudi Arabia in what it says would be the first listing of a global company in the kingdom.
The Saudi stock exchange has been particularly active in seeking to foster international ties, signing pacts with both the Hong Kong and Singapore bourses this year to cooperate in areas such as cross listings. The Persian Gulf’s initial public offerings market remains a bright spot after last year’s boom, drawing international investors amid a global listings drought.
“There is a growing interest among Abu Dhabi and Saudi Arabian shareholders for their internationally based companies either to grow into the Middle East or expand their customer target market into the region and ultimately to list in the Middle East,” said Samer Deghaili, HSBC Holdings Plc’s regional co-head of capital financing and investment banking coverage.
Saudi Energy Minister Tells Oil Speculators to ‘Watch Out’ - Bloomberg
Saudi Arabia’s top energy official issued another warning to oil short-sellers, just over a week before the OPEC+ alliance is due to meet.
Riyadh and its partners surprised crude traders last month by announcing output cutbacks intended to scare off speculators. Money managers have turned bearish again in recent weeks amid fears of a weaker global economy.
“I keep advising them that they will be ouching — they did ouch in April,” Saudi Energy Minister Prince Abdulaziz bin Salman said at the Qatar Economic Forum in Doha on Tuesday. “I would just tell them: Watch out!”
Oil prices have fluctuated around $75 a barrel in London this month as traders weigh a positive outlook for demand against faltering economic data from China, risks of recession in the US and a protracted battle over America’s debt ceiling.
Qatar Economic Forum (QEF) in Doha Latest News Updates: May 23, 2023 - Bloomberg
Saudi Arabia’s top energy official issued another warning to oil short-sellers, just over a week before the OPEC+ alliance is due to meet.
“I keep advising them that they will be ouching — they did ouch in April,” Saudi Energy Minister Prince Abdulaziz bin Salman said at the Qatar Economic Forum in Doha on Tuesday. “I don’t have to show them my cards and I’m not a poker player. But I’d tell them: ‘Watch out’.”
The prince — famous for telling short-sellers they would be left “ouching like hell” — returned to the theme at a panel discussion at the forum alongside Qatar’s energy minister Saad Al-Kaabi and his Iraqi counterpart Hayyan Abdul Ghani to discuss what’s next for global energy supplies and demand.
QIA commits up to 1 bln riyals to local market-making program | Reuters
Qatar Investment Authority (QIA) said on Tuesday it was committing up to 1 billion riyals ($275 million) towards a permanent market-making program that will enhance liquidity on the local bourse.
The $445 billion sovereign wealth fund said the commitment is set to run over the next five years and will cover 90% of the size of the market capitalisation listed on the Qatar Stock Exchange (QSE).
The QIA said the move will also help improve price discovery and diversify capital markets in the country, which would help the market attract foreign asset managers to invest in local shares.
Qatar missed an IPO boom that swept neighbouring Saudi Arabia and the United Arab Emirates last year and market insiders attribute the dearth of deals in Qatar to the impact of the coronavirus pandemic and the country's focus on organising the World Cup.
In January, Qatar's bourse welcomed its first IPO, IT services firm MEEZA, in almost three years under new regulations which allowed companies to offer a price range to test investor appetite and determine pricing.
Most Gulf markets subdued on weaker Asia, volatile energy prices | Reuters
Most Gulf stock markets were subdued on Tuesday, mirroring a decline in Asian shares and volatile energy prices as standoff over the U.S. debt ceiling capped investor risk appetite, although Abu Dhabi edged up led by hospital operator Burjeel.
Oil prices — a key catalyst for gulf's financial markets — fell, hit by investor concern over the risk of a U.S. debt default, with Brent crude falling 26 cents, or 0.3%, to $75.73 a barrel by 0807 GMT.
Saudi Arabia's benchmark stock index (.TASI) eased 0.1%, falling for a third session in a row, dragged down by financial stocks, with Al Rajhi Bank (1120.SE), Saudi Arabia's second-largest lender by assets, and Riyad Bank (1010.SE) slipping 0.3% 0.4%, respectively.
The state oil giant and index heavyweight Saudi Aramco (2222.SE) was down 0.2%.
Abdulmohsen Al-Hokair Group (1820.SE) dropped more than 4%, after its quarterly losses widened to 34.34 million riyals ($9.16 million), while revenue from almost all the segments decreased.
Dubai's main share index (.DFMGI) fell 0.3%, led by property and financial stocks, with both blue-chip developer Emaar Properties (EMAR.DU) and lender Dubai Islamic Bank (DISB.DU) dropping more than 1%.
Qatar's benchmark stock index (.QSI) also fell 0.1%, led by the declines in financial stocks. Index heavyweight Qatar Islamic Bank (QISB.QA) and Qatar National Bank (QNBK.QA), the region's largest bank, declined 0.7% and 0.2%, respectively.
The Abu Dhabi benchmark index (.FTFADGI), however, edged up 0.2%, in a second session of gains, led by a 2.7% jump in Burjeel Holdings (BURJEEL.AD) after it announced the launch of an advanced gynaecology institute.
Emirates Telecommunications Group jumped more than 3%.
