#SaudiArabia officially joins BRICS bloc - state TV

Saudi Arabia officially joins BRICS bloc - state TV

Saudi state TV said on Tuesday that the kingdom had officially joined the BRICS bloc of countries.

Saudi Arabia's foreign minister had said in August the kingdom would study the details before the proposed Jan. 1 joining date and take "the appropriate decision".

Prince Faisal bin Farhan had said the BRICS group was "a beneficial and important channel" to strengthen economic cooperation.

The BRICs bloc previously included Brazil, Russia, India, China, and South Africa, but is set to double with Saudi Arabia joining the United Arab Emirates, Egypt, Iran, and Ethiopia as new members.

Saudi Arabia's entry comes amid geopolitical tensions between the U.S. and China, and the expansion of China's influence within the kingdom.

Despite continued strong ties with the U.S., Saudi Arabia has increasingly pursued its own path out of concern that Washington is less committed to the Gulf's security than in the past.

China, Saudi Arabia's biggest oil customer, has led calls for the BRICs to expand to become a counterweight to the West.

The expansion could amplify the group's declared ambition to become a champion of the Global South, although Argentina signalled in November it would not take up an invitation to join.

GCC equity markets underperform in 2023: Kamco Invest

GCC equity markets underperform in 2023: Kamco Invest

The GCC equity market index closed 2023 with one of the smallest annual gains at 714.69 points, registering a rise of 3.7% after recording mixed performance at the country level. This pales in comparison to double-digit gains for most major global equity markets.

Out of the seven exchanges, four recorded gains while three closed in the red, said Kamco Invest, a regional non-banking financial powerhouse.

Dubai was the best performing market in the region with a gain of 21.7% followed by Saudi Arabia, also with a double-digit gain of 14.2%. Bahrain and Qatari indices also closed in the green, although with much smaller gains of 4.0% and 1.4%. On the other hand, Oman was the biggest decliner in the region with a fall of 7.1% followed by 6.5% decline in the Kuwait All Share index and 6.2% decline in ADX.

Strong IPO pipeline

The performance in the GCC also highlighted the importance of a strong pipeline of IPOs that are critical for attracting international capital flows and generating resilient market performance.

Both Saudi Arabia and Dubai exchanges saw IPOs of some of the key companies in the region garnering strong investor demand. The markets, especially Saudi Arabia, were also insulated from the decline in crude oil prices that is still essential for economic growth in the region.

The MSCI GCC Index was up by 3.7% during the year after reporting a relatively smaller decline during 2022. The trend in the index showed volatile performance during the year.

Geopolitical tensions

The index declined to a 2.5 year low during October-2023 led by geopolitical tensions related to the war on Gaza and its impact on the region as well as subdued oil prices since the start of the year due to demand growth concerns, especially related to the recovery in China.

However, due to the minimal impact from the war, the region witnessed swift recovery, in line with the recovery seen in other key global equity markets. The MSCI GCC index recovered almost 15% since the end of October-2023. One of the most notable trend during the 2H-2023 was the stark disconnect between crude oil prices and the GCC index as both the asset classes moved in opposite direction.

The performance of individual markets in the GCC were mixed in 2023. Dubai was the best performing market in the region with a strong double-digit gain of 21.7% followed by Saudi Arabia also with a healthy gain of 14.2%.

Gains in Dubai

Gains in Dubai were led by almost 50% gain in the Consumer Discretionary index and 38.4% gain in the heavyweight Real Estate Index that were partially offset by decline in Consumer Staples, Communications and Materials indices while in Saudi Arabia, the gains were led by a broad-based positive performance across sectors.

Bahrain and Qatari indices also reported positive gains of 4.0% and 1.4%, respectively. On the other hand, Oman reported the biggest decline in the GCC during the year with the MSX 30 index recording a slide of 7.1%. Kuwait was next with the All Share index sliding by 6.5% closely followed by last two year’s best performer Abu Dhabi with a decline of 6.2%.

The GCC sector performance chart showed gains across the board with all sectors in the green. The Pharma (+75.8%), Insurance (+57.9%) and Healthcare (+37.7%) indices topped yearly performance while heavyweight sectors like Banks and Energy showed relatively smaller gains of 6.1% and 20.0%, respectively.

Most Gulf markets rise on US rate cut bets; #Qatar retreats | Reuters

Most Gulf markets rise on US rate cut bets; Qatar retreats | Reuters

Most stock markets in the Gulf ended higher on Tuesday on bets that the U.S. Federal Reserve will start to cut interest rates early this year, although the Qatari index retreated on profit-taking.

Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by Fed decisions as most regional currencies are pegged to the U.S. dollar.

Saudi Arabia's benchmark index (.TASI) gained 0.7%, with the country's biggest lender Saudi National Bank (1180.SE) rising 4%.

In Abu Dhabi, the index (.FTFADGI) was up 0.1%.

Oil prices - a catalyst for the Gulf's financial markets - rose more than 2% in the first session of the new year, boosted by potential disruption to Middle Eastern supply after the latest attack on a container ship in the Red Sea, and by Chinese demand hopes.

U.S. helicopters on Sunday repelled an attack by Iran-backed Houthi forces on a Maersk container vessel in the Red Sea, sinking three Houthi vessels and killing 10 of the militants, fuelling risks of the Israel-Hamas war becoming a wider conflict.

Dubai's main share index (.DFMGI) advanced 0.8%, with toll operator Salik Co (SALIK.DU) jumping 4.5% and sharia-compliant lender Dubai Islamic Bank (DISB.DU) finishing 1.4% higher.

The Qatari benchmark (.QSI) retreated more than 1%, snapping an eleven-session winning streak, weighed down by a 2.8% decline in Qatar Islamic Bank (QISB.QA).

Outside the Gulf, Egypt's blue-chip index (.EGX30) climbed 2.7%, with most of the stocks on the index in positive territory, including top lender Commercial International Bank (COMI.CA), which was up 3.1%.

Major Gulf markets ease in early trade; #Saudi index gains | Reuters

Major Gulf markets ease in early trade; Saudi index gains | Reuters

Major stock markets in the Gulf fell in early trade on Tuesday in the absence of fresh catalysts, although the Saudi index bucked the trend to trade higher.

The Qatari index (.QSI) dropped 1.2% and was on course to snap eleven sessions of gains, weighed down by a 2.8% decline in Qatar Islamic Bank (QISB.QA) and a 3.2% decrease in Commercial Bank (COMB.QA).

In Abu Dhabi, the index (.FTFADGI) lost 0.2%. Dubai's main share index (.DFMGI) eased 0.1%, with blue-chip developer Emaar Properties (EMAR.DU) losing 1.4%.

Saudi Arabia's benchmark index (.TASI) gained 0.2%, with the country's biggest lender Saudi National Bank (1180.SE) rising 1.8% and oil giant Saudi Aramco (2222.SE) up 0.2%.

Oil prices - a catalyst for the Gulf's financial markets - jumped 1.5% in the first session of the New Year due to potential supply disruptions in the Middle East after a naval clash in the Red Sea.

U.S. helicopters repelled an attack on Sunday by Iran-backed Houthi militants on a Maersk container vessel in the Red Sea, sinking three Houthi ships and killing 10 militants.

Hopes for strong holiday demand and economic stimulus in China, the top crude importer, also supported oil.

Separately, Saudi Arabia's deadline for foreign firms to establish their regional headquarters in the kingdom or lose out on hundreds of billions of dollars in government contracts went into effect on Monday, as did several exceptions to the rule.