Most Gulf markets track global shares lower; IHC boosts #AbuDhabi | Reuters

Most Gulf markets track global shares lower; IHC boosts Abu Dhabi | Reuters

Most stock markets in the Gulf ended lower on Wednesday, tracking global shares as market optimism about early U.S. interest rate cuts ebbed, while the latest escalation of hostilities in the region also weighed on sentiment.

Fed officials in December predicted 75 basis points (bps) of rate cuts in 2024, driving money market bets for around double that amount of cuts that prompted a cross-market year-end rally.

U.S. data this week should clarify the outlook.

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) dropped 1.6%, dragged down by a 3.8% fall in Elm Co (7203.SE) and a 0.3% decrease in oil giant Saudi Aramco (2222.SE).

Oil prices - a catalyst for the Gulf's financial markets - dipped slightly after sharp moves earlier in the week, with investors cautious about the U.S. economy amid supply disruptions from persistent tensions in the Red Sea.

The Qatari benchmark (.QSI) slid 3%, its biggest intraday fall since June 2022, extending losses from the previous session when it snapped an 11-session winning streak.

Qatar Islamic Bank (QISB.QA) plunged 6.5% and petrochemical maker Industries Qatar (IQCD.QA) fell 3.3%.

Dubai's main share index (.DFMGI) eased 0.3%, with blue-chip developer Emaar Properties (EMAR.DU) losing 2%.

Amid growing regional tensions, Hamas deputy leader Saleh al-Arouri was killed on Tuesday in an Israeli drone strike in Lebanon's capital Beirut, Lebanese and Palestinian security sources said, raising the risk of war in Gaza spreading well beyond the Palestinian enclave. Israel has neither confirmed nor denied that it killed Arouri.

In Abu Dhabi, the index (.FTFADGI) gained 1.3%, buoyed by a 3.5% jump in conglomerate International Holding Company (IHC) (IHC.AD).

IHC - which is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, the UAE's national security adviser - has formed a new holding company that will hold a $27 billion portfolio across industries from asset management to mining.

Outside the Gulf, Egypt's blue-chip index (.EGX30) fell 0.3%.

Hong Kong: Regal Hotels Heir Bets on Middle East With Billion-Dollar Hotel Plan - Bloomberg

Hong Kong: Regal Hotels Heir Bets on Middle East With Billion-Dollar Hotel Plan - Bloomberg

Hailing from one of Hong Kong’s most influential clans, Poman Lo has an ambitious plan for her family’s hotel business — venturing into a region relatively untouched by the city’s developers with dozens of green hotels.

Regal Hotels International Holdings Ltd. is partnering with the Ministry of Investment of Saudi Arabia to build about 100 hotels around the world worth $5 billion, with an emphasis on the Middle East. It will have about 30 hotels in Saudi Arabia, Lo, vice chairman and managing director at Regal, said in an interview.

The move underscores the growing ties between Hong Kong and the Middle East as the financial hub navigates US-China tensions. Lo joined Chief Executive John Lee’s trip to the region early last year with a group of business executives.

“Given the deepening ties and collaborations with Saudi and China, I think Hong Kong can play that super connector role,” Lo said. Foreign companies tend to want to work with Hong Kong companies due to the city’s legal infrastructure, she said.

With Western investors cutting capital, “a lot of Chinese funds as well as companies are going to Saudi to seek investments, so there’s a lot of business travel,” she said. This provides opportunities for Regal, which plans to build the hotels under the iclub brand targeting entrepreneurs.

Regal plans to finish the construction by 2035, without disclosing how much it will invest. Saudi Arabia’s investment ministry will help secure funds for the projects, while Regal is also open to accept capital from investors in mainland China and Hong Kong. Japan, Southeast Asia and China are among other regions that Regal prioritizes.

#AbuDhabi Royal Sheikh Tahnoon Sets Up 2PointZero With $27 Billion in Assets - Bloomberg

Abu Dhabi Royal Sheikh Tahnoon Sets Up 2PointZero With $27 Billion in Assets - Bloomberg

Abu Dhabi’s largest listed company, led by a key member of the emirate’s royal family, is setting up a new holding firm with assets worth 100 billion dirhams ($27 billion) across sectors ranging from financial services to mining.

The new firm, called 2PointZero, will be transferred into Abu Dhabi’s $239 billion International Holding Co. Its holdings will include portions of Sheikh Tahnoon bin Zayed Al Nahyan’s sprawling empire, according to a statement late Tuesday.

Lunate, Abu Dhabi’s newest fund, will be part of 2PointZero. International Resources Holding, which last month invested more than $1 billion in Zambia’s Mopani copper mine, will also be transferred into the vehicle. Other holdings will include private investment firm Chimera, Egypt’s Beltone Financial, crypto miner Citadel Technologies and Middle East-focused Sagasse Investments.

Shares in IHC rose as much as 3.2% Wednesday, the most in five months, adding about $7.5 billion to the company’s market value.

Sheikh Tahnoon, the United Arab Emirates’ national security adviser and brother to the country’s president, is de facto business chief of the Al Nahyan family. Over the years, he’s emerged as one of the world’s most influential businessmen, and now helms two wealth funds, a $300 billion private investment firm as well as the nation’s largest lender.

IHC is a key part of this empire. Once an obscure fish farming firm, it’s now twice the size of Goldman Sachs Group Inc. and Blackstone Inc. Still, that hasn’t enticed many international investors and IHC isn’t covered by analysts tracked by Bloomberg.

#Saudi non-oil business activity expands in Dec, new orders jump-PMI | Reuters

Saudi non-oil business activity expands in Dec, new orders jump-PMI | Reuters

Non-oil business activity in Saudi Arabia grew solidly in December, a survey showed on Wednesday, with new orders rising at the fastest pace in six months.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index stood at 57.5 in December, the same as November's reading, ending the year well above the 50 mark signalling growth.

The output sub index with a reading of 61.0 also remained broadly at similar solid levels in December as in the previous month, while new orders surged with the sub index advancing to 68.3, up from 66.3 in November and the highest reading since June on improving demand.

The strongest rise was in the manufacturing sector.

"This growth was supported by a sharp rise in business activity and exports, highlighting the resilience and strength of the non-oil economy," Naif Al-Ghaith, Riyad Bank's chief economist, said.

However, while firms continued to add jobs in December, the pace of growth in employment slowed further last month from November and was sharply lower than October's nine-year high.

Joblessness among Saudi citizens rose to 8.6% in the third quarter, latest government data showed, from 8.3% in the second quarter, but still lower than the 9.9% recorded in the same period a year earlier.

The kingdom is investing heavily to diversify away from hydrocarbons, expand the private sector and create jobs for Saudis; non-oil growth is expected to significantly outpace overall growth in 2023 as lower oil prices and production weigh.

While survey respondents expected output activity to continue to expand in 2024, the degree of confidence softened in December from the previous month. Construction firms were more optimistic about growth prospects than other sectors.

Major Gulf markets ease as rate cut hopes recede; IHC buoys #AbuDhabi | Reuters

Major Gulf markets ease as rate cut hopes recede; IHC buoys Abu Dhabi | Reuters

Most major stock markets in the Gulf fell in early trade on Wednesday, tracking Asian shares lower as market optimism about early and aggressive U.S. interest rate cuts ebbed ahead of the release of Fed minutes and jobs data.

Later on Wednesday, minutes of the U.S. Federal Reserve's December meeting and the ISM survey on U.S. manufacturing are due to be released. The closely watched U.S. nonfarm payrolls report is due on Friday.

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) dropped 0.4%, hit by a 1.2% fall in Al Rajhi Bank (1120.SE) and a 0.2% decline in oil giant Saudi Aramco (2222.SE).

Oil prices - which fuel the Gulf's economy - were little changed in Asian trade after sharp moves earlier in the week, as markets weighed concerns about the U.S. economy against potential supply disruptions from ongoing tensions in the Red Sea.

Non-oil business activity in Saudi Arabia grew solidly in December, a survey showed on Wednesday, with new orders rising at the fastest pace in six months.

The Qatari index (.QSI) retreated 1.6%, on course to extend losses from the previous session when it snapped eleven sessions of gains.

Qatar Islamic Bank (QISB.QA) declined 2.3% and Commercial Bank (COMB.QA) slid 3.8%.

Dubai's main share index (.DFMGI) lost 0.1%, with sharia-compliant lender Dubai Islamic Bank (DISB.DU) falling 0.7%.

In Abu Dhabi, the index (.FTFADGI) advanced 1.4%, buoyed by a 3.2% jump in conglomerate International Holding Company (IHC) (IHC.AD)

IHC - which is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, the UAE's national security adviser - announced it had established 2PointZero, a holding company that will have more than 100 billion dirhams ($27 billion) in assets.