Most Gulf markets fall amid US trade concerns | Reuters

Most Gulf markets fall amid US trade concerns | Reuters

Most stock markets in the Gulf ended lower on Monday due to uncertainty surrounding U.S. trade policy, although the Qatari index bucked the trend.

U.S. President Donald Trump reaffirmed his commitment to enforcing tariffs, with a recent dispute with Colombia centered on migration-related issues that prompted Trump to threaten the country with tariffs and sanctions. The move sent a clear signal that the U.S. would not hesitate to act to protect its interests.

Investors in the region are increasingly cautious due to the unpredictable nature of U.S. trade decisions, which have the potential to significantly impact global markets.

 

The ongoing tensions between the U.S. and its trading partners have created a climate of uncertainty, making it challenging for investors to make informed decisions.

Saudi Arabia's benchmark index (.TASI), opens new tab gave up early gains to close 0.1% lower, hit by a 0.5% fall in Al Rajhi Bank (1120.SE), opens new tab and a 2.1% decrease in Saudi Arabian Mining Company (1211.SE), opens new tab.

However, the index's losses were limited by gains in the real estate division with Jabal Omar Development Company (4250.SE), opens new tab soaring 10%.

The kingdom's Capital Market Authority (CMA) said foreign investors will be permitted to invest in Saudi-listed real estate companies operating in Mecca and Medina from Jan. 27.

Dubai's main share index (.DFMGI), opens new tab dropped 0.7%, weighed down by a 2.3% fall in blue-chip developer Emaar Properties (EMAR.DU), opens new tab.

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

Meanwhile, oil market momentum was kept in check as prices fluctuated in and out of negative territory, with traders on edge despite the U.S. pulling back from initial sanctions threats against Colombia, reducing immediate concern over oil supply disruptions.

The Qatari benchmark (.QSI), opens new tab rose 0.2%, helped by a 1.5% rise in Commercial Bank (COMB.QA), opens new tab.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab declined 1%, as most of its constituents were in negative territory including Commercial International Bank (COMI.CA), opens new tab, which was down 0.8%.

#SaudiArabia Opens Foreign Property Investments in Holy Cities - Bloomberg

Saudi Arabia Opens Foreign Property Investments in Holy Cities - Bloomberg

Saudi Arabia said it will begin allowing foreigners to invest in publicly-traded companies owning real estate in the holy cities of Makkah and Madinah for the first time as the kingdom looks to draw in more overseas investment.

Starting today, foreign investors can purchase shares and convertible debt instruments in firms listed on the Saudi stock exchange that own either public or private real estate within the boundaries of the cities, according to a statement from the Capital Market Authority. An exception applies to strategic foreign investors and foreign ownership cannot exceed 49% of a company’s listed shares, the CMA said.

Shares of some real estate firms rose on the news. Jabal Omar Development Co. jumped as much as 10% at the open in Saudi Arabia. Taiba Investments Co.. Emaar Economic City and Makkah Construction & Development Co., were also among the stocks that climbed.

Saudi Arabia has been undertaking efforts to boost its appeal as an investment destination under the Vision 2030 diversification agenda, including by introducing sweeping reforms to investment laws and loosening rules on foreign ownership in the stock market. The kingdom is also carrying out various expansion projects in Makkah and Madinah as it aims to accommodate 30 million foreign worshippers a year by 2030.

“This is a recognition of the key role that foreign investors have in enabling the recycling of capital into new real estate developments within the kingdom,” Christopher Payne, partner and chief economist for MENA at Knight Frank said of the new rules.

REITs listed in the country “tend to invest across sectors and across the kingdom, so these regulatory changes will likely have a significant impact now, and going forward as more REITs are listed,” he said.

Non-Muslims are not allowed to own property in the holy cities of Makkah and Madinah, even after Saudi Arabia gradually allowed some foreigners to own property in various parts of the kingdom.

Foreigners can obtain long-term residency in Saudi Arabia by investing 4 million riyals ($1.1 million) into residential real estate, a rule that was introduced only few years ago. The two holy cities are coveted locations by investors who see stable, long term demand.

Hotel operators and apartment owners can make sizable return because the religious requirements for every able bodied Muslim to complete a Hajj pilgrimage once in a lifetime drives demand to the cities. Some funds from Islamic majority countries have obtained long-term leases on towers of residential apartments which are used to cater to pilgrims from their countries.

In 2021, the CMA allowed non-Saudis to subscribe to real estate funds investing within the boundaries of the holy cities, but not make direct investments in company shares or debt instruments.

Watch How Will #SaudiArabia Respond to Trump's $1 Trillion Demand? - Bloomberg video

Watch How Will Saudi Arabia Respond to Trump's $1 Trillion Demand? - Bloomberg

US President Donald Trump’s push for $1 trillion of investments from Saudi Arabia is “completely unrealistic,” according to Karen Young, a senior research scholar at Columbia University. But, the kingdom might make promises of defense purchases and service contracts over a long period, she told Jennifer Zabasajja on Bloomberg TV’s Horizons Middle East and Africa. (Source: Bloomberg)