Gulf Equities Market Update
Gulf equities were mixed in early trade on Wednesday as investors priced in a U.S. rate cut later in the day and turned cautious ahead of Federal Reserve Chair Jerome Powell’s speech. The speech is expected to reveal the Fed’s stance, which carries heavy clout in the Gulf where most currencies are pegged to the U.S. dollar, anchoring regional monetary policy.
Market Expectations
Traders expect a 25-basis-point cut, but the Fed’s future rate path remains uncertain. This uncertainty has led to cautious trading in the Gulf equities market. The U.S. rate cut is expected to have a significant impact on the Gulf economies, as most of their currencies are pegged to the U.S. dollar.
Country-Wise Market Performance
Saudi Arabia
Saudi Arabia’s benchmark stock index, TASI, inched up 0.3%, supported by sector-wide strength. Saudi Aramco rose 0.3%, while Saudi Arabian Mining ascended 0.4%, on track to post seven consecutive sessions of wins. Petrochemical operator Sipchem also rose 0.1% following the appointment of a chief executive officer.
Dubai
Dubai’s main share index, DFMGI, fell 0.5%, hit by broad-based sectoral losses. Real estate led the decline, with blue-chip company Emaar Properties sliding 1.4%. Shares of Dubai Investments slipped 0.3% after the firm announced plans to sell up to 25% stake in its Dubai Investments Park (DIP) real estate business through an initial public offering (IPO). However, Mashreqbank jumped nearly 2% as the lender launched a full-service digital retail bank in Pakistan.
Abu Dhabi
In Abu Dhabi, the benchmark index, FADGI, edged down 0.1%, on course to snap four straight sessions of gains. Abu Dhabi Commercial Bank declined nearly 2% as investors locked in profits from recent strength.
Qatar
Qatar’s stock index, GNRI, inched up 0.5%, with buying concentrated in financials and utilities monopoly, Qatar Electricity and Water, which gained nearly 1%. Shares of Qatar National Bank, the region’s largest lender, climbed 0.6%.
Conclusion
The Gulf equities market is experiencing a mixed trend, with some countries like Saudi Arabia and Qatar showing positive growth, while others like Dubai and Abu Dhabi are experiencing declines. The U.S. rate cut and Fed’s future rate path are expected to have a significant impact on the Gulf economies. Investors are advised to exercise caution and keep a close eye on the market trends and economic indicators.
