Dubai's benchmark stock index surged to its highest level in more than a decade on Thursday, while most other markets in the Gulf were muted as investors braced for fewer rate cuts by the U.S. Federal Reserve next year.
The Dubai index (.DFMGI), opens new tab rallied for a third straight session, up 0.6% at 5,112, its highest in 10 years and three months. Dubai Electricity and Water Authority (DEWAA.DU), opens new tab rose 1.5% and Emaar Development (EMAARDEV.DU), opens new tab advanced 2%.
Shuaa Capital (SHUA.DU), opens new tab climbed 5.4% to hit its highest in nearly four months. The investment bank's board on Friday approved a deal with a senior creditor to restructure 208 million dirhams ($56.64 million) in debt facilities.
The Dubai index is on track to post a fourth consecutive annual gain, surging 25.9% this year, its biggest jump since 2021.
"Dubai's solid fundamentals and diversified economic structure place it in a unique position compared to other GCC economies," said Hani Abuagla, senior market analyst at XTB MENA.
"Prospects for further market growth are high on strong projections and new IPO activities next year."
The Qatari benchmark index (.QSI), opens new tab slipped for a fourth straight session, ending 0.5% lower. Qatar National Bank (QNBK.QA), opens new tab dropped 1.2% and Ooredoo (ORDS.QA), opens new tab lost 1.3%.
Saudi Arabia's benchmark stock index (.TASI), opens new tab was down for a third straight day, falling 0.3%. Oil giant Saudi Aramco (2222.SE), opens new tab shed 0.3% and Saudi Industrial Investment (2250.SE), opens new tab dropped 2.7% after its board proposed a capital decrease and no dividend for second half of 2024 and first half of 2025.
The Abu Dhabi benchmark index (.FTFADGI), opens new tab eased 0.4%, pressured by a 1% decline in conglomerate International Holding (IHC.AD), opens new tab and a 0.7% drop in First Abu Dhabi Bank(FAB.AD), opens new tab.
Since Fed Chair Jerome Powell primed markets for fewer rate cuts next year, traders are now pricing in just about 35 basis points worth of easing for 2025.
The Fed's decisions have a significant impact on the Gulf region's monetary policy, as most currencies there are pegged to the U.S. dollar.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab fell 0.2%, weighed down by a 0.9% drop in Commercial International Bank (COMI.CA), opens new tab and a 2.1% loss in El Sewedy Electric (SWDY.CA), opens new tab.
