Gulf markets end mixed on Fed easing hopes, soft oil prices | Reuters

Gulf markets end mixed on Fed easing hopes, soft oil prices | Reuters

Gulf stock markets ended mixed on Thursday, amid rising expectations of a Federal Reserve rate cut next month, while subdued oil prices capped overall risk appetite.

With a dearth of data on the U.S. economy following the end of the government shutdown, investors are focusing intensely on statements from Federal Reserve officials, with remarks this week significantly strengthening expectations for a rate cut.

According to the CME FedWatch Tool, traders now assign an 85% probability to a rate cut next month, up sharply from just 30% a week ago.

U.S. monetary policy shifts have a significant impact on Gulf markets, where most currencies are pegged to the dollar.

Saudi Arabia's benchmark index (.TASI), opens new tab finished 0.1% higher, snapping a three-session losing streak, with Al Rajhi Bank (1120.SE), opens new tab gaining 0.4% and Saudi National Bank (1180.SE), opens new tab, the country's biggest lender by assets, up 0.7%.

The market remains impacted by lower oil prices and their bearish outlook. If the downtrend in crude oil continues, it may further weigh on the index, said Daniel Takieddine, co-founder and CEO of Sky Links Capital Group.

Elsewhere, oil behemoth Saudi Aramco (2222.SE), opens new tab inched 0.4% higher.

Oil prices - a catalyst for the Gulf's financial markets - steadied on Thursday as market participants weighed talks to end the war in Ukraine against the impact of Western sanctions against Russian supply, though trading was set to remain thin due to the U.S. Thanksgiving holiday.

Dubai's main share index (.DFMGI), opens new tab was up 0.1%, helped by a 3.3% leap in budget airline Air Arabia (AIRA.DU), opens new tab.

According to Takieddine, the market's underlying fundamentals are still sound while a sustained recovery would depend on a broader improvement in investor sentiment.

In Abu Dhabi, the index (.FTFADGI), opens new tab dropped 0.3%, with Dana Gas (DANA.AD), opens new tab shedding 2.6%, after a rocket strike targeted its Khor Mor facility, one of the largest gas fields in Iraqi Kurdistan.

The attack on Wednesday prompted the suspension of operations at the gas field and caused major power cuts across the region.

The Qatari index (.QSI), opens new tab slipped 0.4%, with Qatar Islamic Bank (QISB.QA), opens new tab retreating 1.1%.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab advanced 1.3%, with Commercial International Bank (COMI.CA), opens new tab closing 1.6%.

Jefferies Joins Wall Street Peers in #Saudi Private Credit Push - Bloomberg

Jefferies Joins Wall Street Peers in Saudi Private Credit Push - Bloomberg

Jefferies Financial Group Inc. is making its first foray into Saudi Arabia’s private credit space, leading a $125 million financing deal for finance startup Erad.

The investment bank and co-investor Channel Capital are providing an asset-backed, scalable facility that will allow Erad to boost its lending to domestic small-and-medium sized companies through its platform, according to a statement from the Riyadh-based firm.

With the Erad deal, Jefferies joins a raft of major Wall Street investment banks pursuing private credit opportunities in the kingdom and the broader Gulf region. Two months ago, Saudi buy-now, pay-later unicorn Tamara secured a major asset-backed facility of as much as $2.4 billion from several finance firms including Goldman Sachs Group Inc. and Citigroup.

Until recently, private credit as an asset class barely existed in Saudi Arabia. But the country’s corporates are increasingly turning to alternative forms of financing as domestic banks are constrained by the funding needs created by the country’s mammoth economic overhaul.

The need for new sources of funding is especially pressing in the SME sphere, where companies struggle to receive backing from local banks. Erad said that the Gulf’s SMEs form “the backbone” of the region’s diversification efforts but that “despite their critical role” they face a $250 billion financing gap limiting their growth potential.

The deal “demonstrates the strategic importance of alternative finance in supporting the Kingdom’s goal of SME growth,” said Erad’s co-founder Salem Abu-Hammour.

The facility will help Erad meet the growing demand from SMEs in the Gulf and broaden its reach beyond traditional consumer sectors into manufacturing, logistics, distribution, and real estate services. Earlier this year, Erad already secured $33 million through a debt financing round led by Stride Ventures.

For Jefferies, it’s the bank’s first asset-backed financing transaction in Saudi Arabia, a deal that will also boost its presence in the kingdom. The New York-based investment bank has been beefing up its presence in the Middle East in recent years.