Most Gulf shares join global decline as Fed sounds hawkish | Reuters

Most Gulf shares join global decline as Fed sounds hawkish | Reuters

Most stock markets in the Gulf tracked global equities lower on Thursday after the U.S. Federal Reserve signaled a slower pace of rate cuts in the coming year.

Barring Kuwait, all central banks of the Gulf Cooperation Council cut key interest rates on Wednesday, following the Federal Reserve's decision to reduce U.S. rates by a quarter of a percentage point.

The Fed cut interest rates as expected, but Powell's explicit references to the need for caution from here on sent markets into a tailspin.

Saudi Arabia's benchmark stock index (.TASI), opens new tab slipped 0.6%, pressured by losses in most sectors. Al Rajhi Bank (1120.SE), opens new tab fell 1.6% and Almarai Company (2280.SE), opens new tab lost 2.1%.

Saudi Arabia's largest dairy producer, Almrai, said its board had approved a full-year cash dividend of 1 riyal per share, the same as the previous year.

Savola Group (2050.SE), opens new tab surged 10% in its third session of gain and hit its highest level in more than nine years.

The Kingdom's largest foods producer, Savola, said eligible shareholders will receive Almarai shares on Dec 19, after its shareholders approved Sunday the distribution of its entire 34.52% stake in Almarai, valued at 8.34 billion riyals ($2.22 billion), as in-kind compensation for a capital reduction.

Among other gainers, Saudi Aramco (2222.SE), opens new tab rose 1.9%.
Saudi Vice Minister of Mining Affairs said on Tuesday that Lithium Infinity, a startup, will lead the lithium extraction project with cooperation from Aramco and Ma'aden.

The Abu Dhabi benchmark index (.FTFADGI), opens new tab fell 0.2%, weighed down by a 1.8% loss in ADNOC Drilling (ADNOCDRILL.AD), opens new tab, while ADNOC Logistics (ADNOCLS.AD), opens new tab was up 1.5% after it said its integrated logistics business segment expanded significantly in 2024, with 20 offshore assets added.

Dubai's benchmark stock index (.DFMGI), opens new tab was up 0.2%, lifted by gains in most sectors. Emaar Properties (EMAR.DU), opens new tab rose 2.4% and Emirates NBD (ENBD.DU), opens new tab gained 2%.

Dubai's largest lender, ENBD, said Wednesday it and Abu Dhabi Islamic Bank (ADIB.AD), opens new tab have closed a £140 million club deal for student accommodation in London.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab edged up 0.1% after two straight session of loss, with Commercial International Bank(COMI.CA), opens new tab rising 1.1% and Abu Qir Fertilizer (ABUK.CA), opens new tab gaining 3.1%.

"Market remains under pressure and could see some volatility as investors react to the potential for an increasingly stronger dollar", said Milad Azar, market analyst at XTB MENA.

Italy’s Azimut and China Universal team up on #AbuDhabi #UAE ETF link

Italy’s Azimut and China Universal team up on Abu Dhabi ETF link

Italian asset manager Azimut Group and China Universal Asset Management are teaming up to launch an exchange traded fund that will be listed in Abu Dhabi as well as a second ETF in Shanghai to give Chinese and United Arab Emirates investors access to each other’s equities markets. 

Azimut Group will launch an ETF on the Abu Dhabi Securities Exchange that will invest in China Universal AM’s existing Shanghai-listed ETF tracking the CSI A500 index, Azimut confirmed. 

In turn, China Universal AM will roll out an ETF to be listed on the Shanghai bourse that will feed into a separate Abu Dhabi-listed ETF that Azimut plans to launch. It will invest in public companies in the pan-Arab region. 

Azimut expects to launch the Arab company-tracking ETF by the third quarter in 2025, based on an index that covers large, liquid stocks, the spokesperson told Ignites Asia. 

The pair of new ETFs will become part of an ETF connect programme between China and the UAE, Azimut said. 

China has stepped up financial co-operation with Middle East nations over the past few years, and has used ETFs as a way to facilitate cross-border capital flows and closer corporate ties, as it seeks to reinforce the message of further opening up its financial sector. 

The Shenzhen Stock Exchange and Dubai Financial Market in August signed a memorandum of understanding to promote cross-border investing in China and the UAE, and explore co-operation in products including ETFs. 

That agreement was followed by the Shanghai stock exchange, which said earlier in December that it had signed an MOU with the Qatar stock exchange to explore potential co-operation in areas such as ETFs, data and index products. 

The first two ETFs listed in China that invest solely in Saudi Arabia’s equities market, launched by Huatai-PineBridge Fund Management and China Southern Fund Management, enjoyed strong initial demand when they were listed in July this year. 

They feed into CSOP Asset Management‘s CSOP Saudi Arabia ETF, the first Saudi equities market-focused ETF in the Hong Kong exchange, which was launched last year and attracted US$1bn in initial investment. 

China is rapidly expanding ETF tie-ups with other major financial hubs around Asia. 

The Monetary Authority of Singapore said last month it was in talks with its Chinese counterpart to expand the number of ETFs on a cross-listing scheme linking Singapore and Chinese exchanges 

Announced in late 2021 to connect ETFs in the Singapore and Shenzhen bourses, the cross-listing programme was expanded in 2023 to cover the Shanghai exchange. 

Although only seven ETFs had been launched in the scheme by the end of November, amid difficulties in reaching commercial agreements between fund firms and a weak Chinese market that slowed product pipelines, industry participants expected new product launches to pick up in 2025. 

Russell Wang, head of securitised products for global markets at the Singapore Exchange, said the expectation of further government reforms and a rebound in China’s onshore markets meant ETF issuers were now readying more products for next year.


*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com.