Mideast Stocks: Most Gulf bourses end higher on hopes of a Fed rate pause
Most stock markets in the Gulf ended higher on Monday ahead of a widely expected pause in interest rate hike by the U.S. Federal Reserve, while falling oil prices capped gains. Money markets are pricing in a 73.6% chance of the Fed keeping rates steady, and a 26.4% chance of a 25-basis-point rate hike, according to the CME FedWatch tool.
Most Gulf currencies are pegged to the U.S. dollar, while Saudi Arabia, the United Arab Emirates and Qatar usually mirror U.S. monetary policy changes.
Saudi Arabia's benchmark index rose 0.2%, recovering from the previous session's marginal losses. The index was lifted by gains in materials, health and finance sectors with Jabal Omar rising 2.1% and Saudi Industrial Investment gaining 3.9%.
In Abu Dhabi, the index rose 0.1%, keeping its previous sessions gains, supported by a 2.2% rise in ADNOC Drilling and a 0.8% rise in Alpha Dhabi Holding. The United Arab Emirates' biggest lender, First Abu Dhabi Bank added 0.6%.
Dubai's benchmark index continued its 12-session winning streak and ended 0.1% higher. The index was supported by gains in financials and utilities sectors with Union Properties surging 7% and Emaar Properties adding 0.7%. The emirate's largest lender Emirates NBD gained 0.7%.
The Qatari Stock index edged down 0.6%, extending losses from two previous sessions, with most of sectors in the red – led by finance and industry. The region's largest lender Qatar National Bank and index heavyweight Commercial Bank of Qatar lost 0.6% and 1.5%, respectively, while the world's largest LNG shipping fleet owner, Qatar Gas Transport (Nakilat) slid 0.6%.
Oil prices - a key catalyst for the Gulf's financial markets - tumbled on Monday with Brent crude down 1.9% at $72.85 a barrel by 1300 GMT.
Outside the Gulf, Egypt's blue-chip index fell 0.2%, snapping two sessions of gains with Commercial International Bank dropping 1.4% and Telecom Egypt losing 1.9%. Separately, Egypt's annual core inflation rose to 40.3% in May from 38.6% in April, data from the central bank showed on Sunday.
Saudi Arabia’s Flynas in Talks With Airbus About Placing Order - Bloomberg
Saudi Arabian low-cost carrier Flynas is in talks for an Airbus SE jet order, according to people familiar with the matter, as airlines in the country bulk up operations to better compete with regional rivals.
The carrier may announce an accord with the European planemaker as soon as the Paris Air Show starting early next week, said the people, asking not to be identified as discussions are confidential. The carrier said previously that it was considering establishing local units in two additional countries as part of a plan to become the Middle East’s largest discount carrier.
The budget specialist operates an all-Airbus fleet and most recently ordered a mix of A320neo and A321XLR aircraft. The company also has a few Airbus A330 widebody units used predominantly for the Hajj pilgrimage.
Talks between the airline and the manufacturer continue and may not necessarily result in an accord anytime soon, the people said. Airbus declined to comment on a potential order from Flynas, as did the airline.
Last year, Flynas said it was planning to expand its existing jet orders to 250 aircraft.
Saudi Arabia is pumping money into the aviation industry as part of a push to make the economy less dependent on oil and become one of the world’s top tourism destinations by 2030. Flynas, which began flying as Nas Air in 2007, is partly owned by Kingdom Holding Co., the investment vehicle of Saudi billionaire Prince Alwaleed Bin Talal.
Saudi Arabia signs $5.6 bln deal with Chinese EV company - state media | Reuters
Saudi Arabia's Ministry of Investment has signed a $5.6 billion deal with Chinese electric car maker Human Horizons to collaborate on the development, manufacture and sale of vehicles, the Saudi state news agency said in a statement.
The agreement accounts for more than half of the more than $10 billion in investments signed on the first day of an Arab-China business conference in Riyadh on Sunday, in sectors spanning technology, renewable energy, agriculture, real estate, metals, tourism and healthcare among others.
While the relationship between Saudi Arabia, the world's top oil exporter, and China remains anchored by energy ties, there has been a push to boost investments in non-oil sectors as part of the kingdom's diversification agenda.
Part of the Saudi plan is to develop a domestic electric vehicle (EV) manufacturing industry. Human Horizons manufactures electric vehicles under the HiPhi brand in China.
Chinese foreign direct investment into Arab markets stood at $23 billion in 2021, of which $3.5 billion as in Saudi Arabia, the Saudi statement said.
Human Horizons said in March it would launch its premium HiPhi brand in some European markets this year as it looks to expand overseas.
India, UAE agree to raise non-petroleum bilateral trade to $100 bln by 2030: minister | Reuters
India and the United Arab Emirates have mutually agreed to raise non-petroleum bilateral trade between the two countries to $100 billion by 2030, the South Asian nation's trade minister said on Monday.
The central banks of both countries were also discussing rupee-dirham trade mechanism, India trade minister Piyush Goyal said after a meeting with UAE foreign trade minister Thani bin Ahmed Al Zeyoudi.
Most Gulf markets drop in early trade | Reuters
Most stock markets in the Gulf fell in early trade on Monday, tracking oil prices lower ahead of a U.S. Federal Reserve meeting as investors tried to gauge the central bank's appetite for further rate hikes.
Markets are pricing in a 71% probability the U.S. central bank will stand pat when it meets on June 13-14, according to the CME FedWatch tool.
Most Gulf currencies are pegged to the dollar and any monetary policy change in the United States is usually mimicked by Saudi Arabia, the United Arab Emirates and Qatar.
In Qatar, the benchmark index (.QSI) fell 0.1%, with Qatar Gas Transport (Nakilat) losing 1.8% and Ahli Bank trading 1% lower.
Dubai's benchmark stock index (.DFMGI) dropped 0.1% in early trade, weighed down by losses in most sectors, with Emirates Central Cooling Systems losing 1.1% and the Gulf Navigation dropping 3.2%.
In Abu Dhabi, the benchmark stock index (.FTFADGI) was down 0.1%, dragged by a 0.6% loss in Alpha Dhabi Holding and a 0.2% decline in First Abu Dhabi Bank, the largest lender in the United Arab Emirates.
Among the losers, Abu Dhabi National Hotels and Easy Lease lost 5.5% and 4.1%, respectively.
Saudi Arabia's benchmark stock index (.TASI) was down 0.1%, weighed down by losses in healthcare and energy sectors with Saudi Arabian Mining Co (Ma'aden) falling 1.7% and oil giant Saudi Aramco losing 0.6%.
Crude prices — a key catalyst for the Gulf's financial markets — slid 0.9% on Monday with Brent crude down to $74.09 a barrel by 0647 GMT.
Qatar’s Top Dealmakers Get Ready for a Spending Power Boost - Bloomberg
Qatar is targeting more investment in new frontiers and sectors like technology and health care, as high demand for its natural resources and the end of a $300 billion World Cup splurge bring the promise of extra cash to burn.
That has the roughly $450 billion Qatar Investment Authority looking beyond its traditional hunting grounds in Europe and penchant for trophy assets as it searches for new places to write its next big checks, the sovereign wealth fund’s top dealmakers said in an interview with Bloomberg News.
“There is a clear mandate to prepare the institution to handle more inflows in the coming years,” said QIA Chief Executive Officer Mansoor Ebrahim Al-Mahmoud, who rarely speaks to the media. That means increased spending in Asia and the US, where QIA plans to invest across climate change, infrastructure and digitization.
“We will continue to deploy in the continent, but a larger share of our investments will be going to the other two regions, given the opportunities we see in the US and in places like China and India,” said Al-Mahmoud.
