Israel-Iran War Casts Shadow Over #Dubai, #UAE Business Conditions - Bloomberg

Israel-Iran War Casts Shadow Over Dubai, UAE Business Conditions - Bloomberg

Business conditions in the United Arab Emirates suffered a setback in the closing stages of the second quarter after Israel’s war with Iran disrupted sales in June.

The UAE’s Purchasing Managers’ Index rose only slightly to 53.5 last month from 53.3 in May, said S&P Global, citing households’ reluctance to spend for a drop off in demand.

In Dubai, part of the UAE and often considered the Middle East’s business and financial hub, non-oil private sector activity deteriorated with the emirate’s PMI dropping to 51.8 — the lowest in nearly four years — from 52.9, “driven by a marked slowdown in sales growth,” S&P Global said.

“The UAE non-oil sector showed signs of a minor setback in June due to the conflict between Israel and Iran,” said David Owen, senior economist at S&P Global Market Intelligence. “The impact was primarily felt on the demand side, as some businesses reported a slowdown in orders driven by heightened tensions.”

While the Israel-Iran conflict posed a stringent test to the country’s open-to-business approach, Dubai and the wider UAE have generally remained insulated from the latest regional conflict.

Several companies implied that pressures led by competition and weaker tourism due to heightened regional tensions had impacted overall levels of new work, S&P Global said.

Still, “with consumer price pressures appearing limited, the latest data suggests that a rebound in sales growth is wholly possible in the coming months should regional tensions ease,” said Owen.

#SaudiArabia's non-oil sector growth quickens in June on strong demand, PMI shows | Reuters

Saudi Arabia's non-oil sector growth quickens in June on strong demand, PMI shows | Reuters

The expansion in Saudi Arabia's non-oil private sector activity accelerated in June, driven by robust client demand and a surge in hiring, a survey showed on Thursday.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) rose to a three-month high of 57.2 from May's 55.8, putting it further above the 50-point line denoting growth.

New order growth quickened to a four-month high, with the subindex rising to 64.3 in June from 62.5 in May. Domestic sales were the primary driver of this upturn, supported by successful client acquisitions and enhanced marketing strategies. However, export sales growth remained marginal.

"Firms largely linked the pickup in activity to improving sales, new project starts, and better demand conditions, although the pace of output growth was softer compared to previous highs," said Naif Al-Ghaith, chief economist at Riyad Bank.

Non-oil private companies hired staff at the fastest rate since May 2011, as firms expanded teams to manage increased workloads.

Input prices also rose sharply, aligning with the second-quarter trend, leading firms to pass on higher costs to customers. Output prices increased solidly, the strongest rise in a year-and-a-half, following reductions in previous months.

Despite cost pressures, Saudi non-oil firms remained optimistic about future activity, the survey showed, with the Future Output Index reaching a two-year high. Confidence was buoyed by resilient domestic economic conditions and robust demand.

Last month, the International Monetary Fund raised its 2025 GDP growth forecast for Saudi Arabia to 3.5% from 3%, partly on the back of demand for government-led projects, and supported by the OPEC+ group's plan to phase out oil production cuts.

Major Gulf Shares rise as steady PMIs signal growth | Reuters

Major Gulf Shares rise as steady PMIs signal growth | Reuters

Major Gulf stock markets rebounded on Thursday, supported by steady non-oil private sector growth and investor optimism around global trade deals following a U.S.-Vietnam agreement ahead of the July 9 tariff deadline.

President Donald Trump signed a deal with Vietnam on Wednesday, imposing a 20% tariff on exports to the U.S., lower than the threatened 46% and giving markets reason to hope the impact of the tariffs may be less severe than had been expected for many countries.

Saudi Arabia's benchmark index (.TASI), opens new tab rose 1%, hitting a more than one-month high, with almost all of its constituents posting gains.

Saudi National Bank(1180.SE), opens new tab, the kingdom's largest lender by assets, climbed 4.1% and oil major Saudi Aramco (2222.SE), opens new tab added 0.9%.

BlackRock Inc. (BLK.N), opens new tab was in talks with Aramco to divest its stake in the leasing rights of a natural gas pipeline network, potentially worth billions of dollars, Bloomberg reported. Reuters could not immediately verify the report.

Among other gainers, the retailer Fawaz Abdulaziz Al Hokair & Company (4240.SE), opens new tab, the index's best performer, soared 9.9% and Saudi Telecom (7010.SE), opens new tab added 1.2%.

The positive momentum was supported by a healthy domestic outlook, as Saudi Arabia’s non-oil private sector expanded at its fastest pace in three months in June, a survey showed on Thursday.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index rose to a three-month high of 57.2 from May's 55.8, putting it further above the 50-point line denoting growth.

Dubai's benchmark index (.DFMGI), opens new tab gained 1.4% to 5,748, marking a 17-year high with most sectors in the green. Emaar Properties (EMAR.DU), opens new tab jumped 3.7% and tolls operator Salik (SALIK.DU), opens new tab advanced 3.4%.

The Abu Dhabi benchmark index (.FTFADGI), opens new tab rose 0.6%, lifted by gains in most sectors. Presight AI (PRESIGHT.AD), opens new tab surged 6%, hitting its highest level in nearly two years, and Space42 (SPACE42.AD), opens new tab climbed 4.3%.

The UAE's non-oil private sector grew steadily in June even as regional tensions weighed on demand, and companies ramped up output to tackle backlogs, a survey showed on Thursday.

Qatar's benchmark index (.QSI), opens new tab added 0.6%, boosted by a 0.5% increase in the Qatar National Bank (QNBK.QA), opens new tab.