Mideast Stocks: Most Gulf markets in black on slowing US inflation; Saudi slips
Most stock markets in the Gulf ended higher on Thursday, driven by hopes that slowing U.S. inflation will convince the Federal Reserve to hit the pause button on interest rate hikes after this month.
Most Gulf Cooperation Council (GCC) countries, including Qatar, Saudi Arabia and the United Arab Emirates, have their currencies pegged to the U.S. dollar and follow Fed policy moves closely, exposing the region directly to monetary tightening in the world's largest economy.
Dubai's main share index gained 0.4%, closing at its highest since Dec. 2015, led by a 1.6% rise in sharia-compliant lender Dubai Islamic Bank, while Commercial Bank of Dubai advanced 2.6%. The lender reported second-quarter net profit of 650.3 million dirhams ($177.05 million), up from 435.1 million dirhams a year ago.
In Abu Dhabi, the index gained 0.1%. The Qatari index climbed 0.9% with most of the stocks in positive territory, including petrochemical maker Industries Qatar, which ended up 3.7%. Global oil benchmark Brent hovered above $80 a barrel after U.S. inflation data implied interest rates are close to their peak.
Saudi Arabia's benchmark index bucked the trend to close 0.2% lower, hit by a 1.2% fall in Dr Sulaiman Al-Habib Medical Services. However, the Saudi index posted its second weekly gain of 1%. The Saudi bourse saw some pressure after gains this month and last, said Ahmed Negm, Head of Market Research MENA at XS.com.
"While some losses remain possible, improving sentiment, stronger oil markets, and solid local fundamentals could push the market to the upside next week."
Outside the Gulf, Egypt's blue-chip index advanced 1.2%, buoyed by a 4.2% rise in tobacco monopoly Eastern Company . The Egyptian stock market continued its rebound thanks to improving global sentiment. At the same time, the market could benefit from the efforts to move forward with the privatisation program, said Negm.
UAE Royal Sheikh Tahnoon's IHC Drops, Dragging Down Abu Dhabi Index - Bloomberg
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A group of companies controlled by an influential member of Abu Dhabi’s royal family have shed $30 billion in market value this year, contributing to a drop in the emirate’s benchmark index that’s lagged regional peers.
Abu Dhabi’s FTSE ADX General Index is down about 6% year-to-date, significantly under-performing benchmarks in Dubai and Riyadh, which have both risen more than 10%. That’s due in part to a near 4% drop in International Holding Co., the $236 billion conglomerate chaired by United Arab Emirates National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan.
IHC’s shares have rallied in recent years, helping the Abu Dhabi bourse post gains of close to 100% since the start of 2021. IHC’s units, Alpha Dhabi Holding Co. and Multiply Group, have also dropped more than 20% in 2023 after two years of significant gains.
“The current performance of the Abu Dhabi Stock Exchange is partly associated with profit booking on companies that have seen significant gains, including IHC and newly-listed stocks,” said Junaid Ansari, head of investment strategy and research at Kamco Invest.
First Abu Dhabi Bank, the country’s largest lender that’s chaired by Sheikh Tahnoon, is also down by a fifth this year. IHC, FAB, Alpha Dhabi and Multiply together account for just under 60% of the emirate’s benchmark index based on the most recent weightings.
Most Gulf markets gain as US inflation cools, Saudi index eases | Reuters
Most major stock markets in the Gulf rose in early trade on Thursday after U.S. inflation and economic data boosted hopes that the Federal Reserve may have fewer interest rate hikes in store, although the Saudi index bucked the trend.
Most Gulf Cooperation Council (GCC) countries, including Qatar, Saudi Arabia and the United Arab Emirates, have their currencies pegged to the U.S. dollar and follow the Fed's policy moves closely, exposing the region to a direct impact from monetary tightening in the world's largest economy.
Dubai's main share index (.DFMGI) advanced 0.7%, at its highest in eight years, led by a 1.1% rise in utility firm Dubai Electricity and Water Authority (DEWAA.DU).
Among other gainers, Commercial Bank of Dubai (CBD.DU) advanced 3.9%, after reporting a sharp rise in second-quarter earnings.
In Abu Dhabi, the index (.FTFADGI) added 0.1%.
The Qatari benchmark (.QSI) increased 0.7%, with most of the constituents on the index trading in positive territory including petrochemical maker Industries Qatar (IQCD.QA).
Oil prices - which fuel the economy in Gulf - climbed after U.S. inflation cooled and Chinese trade figures showed monthly oil imports were the second-highest on record in June.
Saudi Arabia's benchmark index (.TASI), however, bucked the trend to trade 0.1% lower.
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