Most Gulf markets gain on US rate cut bets | Reuters

Most Gulf markets gain on US rate cut bets | Reuters

Most stock markets in the Gulf ended higher on Wednesday as comments from Federal Reserve Chair Jerome Powell reinforced expectations that U.S. rate cuts were not far off.

Data for May showed the Fed's preferred measure of inflation did not increase at all that month, while the 12-month rate of price increases has ebbed to 2.6%, still above the U.S. central bank's 2% target but on the way down after a scare in the first few months of the year.

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

Dubai's main share index (.DFMGI), opens new tab gained 0.4%, with Emirates Central Cooling Systems (EMPOWER.DU), opens new tab rising 2.7% and toll operator Salik (SALIK.DU), opens new tab gaining 1.4%.

In Abu Dhabi, the index (.FTFADGI), opens new tab was up 0.1%, with ADNOC Drilling (ADNOCDRILL.AD), opens new tab gaining 0.5% after the firm was awarded a $733 million contract for three rigs.

The Qatari benchmark (.QSI), opens new tab added 0.5%, led by a 0.6% gain in Qatar National Bank (QNBK.QA), opens new tab and a 0.9% increase in petrochemical maker Industries Qatar (IQCD.QA), opens new tab.

Oil prices - a catalyst for the Gulf's financial markets - rose as U.S. industry data boosted hopes of solid fuel demand during the summer driving season in the top oil-consuming nation.

Saudi Arabia's benchmark index (.TASI), opens new tab eased 0.1%, falling for a fourth consecutive session, with Al Rajhi Bank (1120.SE), opens new tab losing 0.6%.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab finished 0.6% higher, with Talaat Mostafa Group (TMG) (TMGH.CA), opens new tab advancing 2.1%.

TMG is to invest $21 billion in the SouthMED tourism development that includes luxury villas and a marina on Egypt's Mediterranean coast, its chief executive said on Tuesday.

#Qatar sees fastest non-energy business growth in nearly two years – PMI

Qatar sees fastest non-energy business growth in nearly two years – PMI

Qatar saw its fastest non-energy growth in nearly two years in June with surges in both existing and new business.

Employment also grew for the 16th month in a row as companies expanded, and the country’s 12-month outlook remained strong.

Qatar saw its Purchasing Managers’ Index (PMI) headline figure reach 55.9, up from 53.6 in May, with anything above 50.0 indicating growth in business activity.

Inflationary pressures remained muted, with input prices up only slightly since May and prices charged for goods and services falling, the Qatar Financial Centre (QFC) report said.

The headline figure signalled the strongest improvement in business conditions in the non-energy private sector economy since July 2022 and was above the long-run trend.

Incoming new work expanded at the sharpest rate in 13 months and there was notably faster growth in manufacturing and construction, with sharp growth in other sectors, the report said.

Despite rising demand for goods and services, companies were able to further reduce the volume of outstanding work in June.

Companies linked positive forecasts to new branch openings, new customers, and marketing campaigns.

Prices charged for goods and services fell for the sixth time in the past eight months, as firms reported making discounts to boost competitiveness and win new customers.

Qatari financial services companies recorded a further strengthening in growth of total business activity and new contracts in June.

The seasonally adjusted Financial Services Business Activity and New Business Indexes rose to 13- and nine-month highs of 61.1 and 59.2, respectively, above their long-run trend levels since 2017.

Yousuf Mohamed Al-Jaida, QFC CEO, said the June PMI index was higher than in all pre-pandemic months except for October 2017, which was 56.3.

“Growth has now accelerated five times in the first half of 2024 as the non-energy economy has rebounded from a moderation in the second half of 2023,” he said.

Growth of #UAE’s non-oil businesses impacted by competitive pressures

Growth of UAE’s non-oil businesses impacted by competitive pressures

Growth of business conditions in the UAE non-oil private sector continued to slow down, reaching the slowest rate in 16 months in June, mostly due to competitive pressures. 

The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) slid to 54.6 in June from 55.3 in May. However, companies noted a steep rise in new work during June, with the upturn edging up to the strongest since March.

"The UAE PMI highlights a slowing growth trend in the non-oil sector throughout 2024 so far, with the headline index having lost roughly three points since last December. Nevertheless, companies are still enjoying strong customer demand and robust sales pipelines, which are sustaining output expectations and driving purchasing activity," David Owen, Senior Economist at S&P Global Market Intelligence, said.

"The recent surge in backlogs of work is also showing signs of easing, a trend that is likely to continue as the country recovers from April's floods and supply chains adapt to the current situation in the Red Sea. Supplier lead times improved at the strongest rate for eight months, which will be a further boon for businesses," he said.

The rate of inflation ticked up to the highest seen in nearly two years. Firms struggled to absorb these cost increases, leading them to raise their selling charges for the second month running. Though modest, the rate of inflation was the fastest in over six years, as some companies opted to mark up their fees due to stronger customer demand.

Dubai PMI

The Dubai PMI continued to signal a moderating growth trend across the non-oil private sector economy. The headline index slipped to 54.3 in June, down from 54.7 in May.

Although new order growth remained strong in June and even accelerated, non-oil firms reported the softest increase in activity levels for nearly three years.

Input price inflation meanwhile ticked up in June. However, supplier performance improved sharply and job levels expanded in June.

#AbuDhabi’s Lunate Weighs Raising $5 Billion to Hunt for Deals - Bloomberg

Abu Dhabi’s Lunate Weighs Raising $5 Billion to Hunt for Deals - Bloomberg

Lunate, the year-old fund that’s quickly become a formidable investing force in the Middle East, is considering raising about $5 billion in financing that it could use for potential deals.

Lunate is considering leaning on both international and regional banks for subscription financing, according to people familiar with the matter. The debt would augment its existing $105 billion in assets under management, and give the firm more dry powder to do deals without having to hit up its backers for more cash.

The fund is still in talks with bankers about the financing and it may ultimately decide to forgo borrowing the funds, the people said, declining to be named as the information is private.

A representative for Lunate declined to comment.

Subscription finance facilities allow giants of investing to move more quickly on deals. Traditionally, these funds have to give their limited partners at least 10 days notice when they need to fund a capital call. With subscription finance facilities, though, funds can receive their borrowings with as little as one day’s notice.

The talks are the latest proof that Lunate is looking to be a key player in the Middle East investing scene. The fund was formed just last year and has already gone on a deal spree in recent months.

Earlier this year, Lunate agreed to buy a 40% stake in Adnoc’s oil pipeline network from BlackRock Inc. and KKR & Co. It also recently teamed up with Saudi Arabia’s Olayan Financing Company to buy a 49% stake in ICD Brookfield Place, the largest office tower in Dubai’s financial hub.

The fund has also reached out to some of the key owners in Abu Dhabi National Oil Co.’s gas pipeline unit to express interest in buying their stakes, Bloomberg News previously reported. That interest comes as Global Infrastructure Partners and Italy’s Snam SpA are considering offloading their holdings in the unit.

Lunate was set up by an arm of Sheikh Tahnoon bin Zayed Al Nahyan’s listed conglomerate International Holding Co. It has more than 160 employees and says it’s focused on investments across private equity, venture capital, private credit, real assets, public equities and public credit.

Interest in the private credit, private equity and venture capital industries has exploded in the Middle East as oil revenue has filled the coffers of local institutions in recent years. Gulf sovereign wealth funds and investment firms are pouring money into ever-larger deals for their portfolios despite elevated interest rates. Other investors, as well as banks themselves, are also keen to make more wagers.

#Saudi non-oil activity grows at slowest pace in 2 1/2 years, PMI shows | Reuters

Saudi non-oil activity grows at slowest pace in 2 1/2 years, PMI shows | Reuters

Non-oil business activity in Saudi Arabia expanded at its weakest pace in 2 1/2 years in June as new orders slowed further, although the sector still grew at a healthy clip, a survey showed on Wednesday.

The seasonally-adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index fell to 55.0 in June from 56.4 the previous month, and was the lowest reading since January 2022, although it was still well above the 50-level which indicates growth in activity.

The new orders sub index fell to 56.0 from 59.5 the previous month.

Jobs growth also slowed, although the output sub-index ticked up.

"Looking at the second quarter as a whole, the growth figures for Q2 still indicate a positive outlook for non-oil GDP in Saudi Arabia, with expectations of growth exceeding 3%," said Naif Al-Ghaith, Chief Economist at Riyad Bank.

"The high output levels, stable supply chains, and moderate job creation point towards a resilient and expanding non-oil economy."

Most Gulf markets gain on US rate cuts hopes | Reuters

Most Gulf markets gain on US rate cuts hopes | Reuters

Most major stock markets in the Gulf rose in early trade on Wednesday after comments from Federal Reserve Chair Jerome Powell reinforced expectations US rate cuts are approaching.

Data for May showed the Fed's preferred measure of inflation did not increase that month, while the 12-month rate of price increases ebbed to 2.6%, still above the U.S. central bank's 2% target but on the way down.

Dubai's main share index (.DFMGI), opens new tab gained 0.5%, led by a 2.1% rise in budget airliner Air Arabia (AIRA.DU), opens new tab.

In Abu Dhabi, the index (.FTFADGI), opens new tab edged 0.1% higher.

Growth in the United Arab Emirates' non-oil private sector slowed in June with weaker job creation and an easing in output growth, a survey showed on Wednesday.

The Qatari benchmark (.QSI), opens new tab added 0.3%, with Qatar Islamic Bank (QISB.QA), opens new tab gaining 0.7%.

Oil prices - a catalyst for the Gulf's financial markets - were higher as US industry data boosted expectations of robust fuel demand during the summer driving season in the biggest oil consuming nation.

Saudi Arabia's benchmark index (.TASI), opens new tab eased 0.2%, hit by a 2.5% fall in Al Taiseer Group (4143.SE), opens new tab.

Non-oil business activity in Saudi Arabia expanded at its weakest pace in 2 1/2 years in June as new orders slowed, although the sector still grew, a survey showed on Wednesday.