UAE markets gain on firm oil prices
Stock markets in the United Arab Emirates closed higher on Friday, as oil prices firmed after OPEC+ members Saudi Arabia and Russia indicated readiness to pause or reverse oil output increases.
Oil prices - a key catalyst for Gulf’s financial market were up 0.39% to $79.89 a barrel by 1057 GMT.
Abu Dhabi’s benchmark index gained 0.2%, lifted by a 0.3% increase in UAE’s largest listed firm, International Holding Company and a 0.9% hike in IHC-owned conglomerate Alpha Dhabi Holding.
Among the gainers, sports management firm Palms Sports surged 4.8% after being selected as the El Qalaa El Hamraa Mega Sports Complex operator in Egypt. Dubai’s main index settled 0.1% higher, breaking three sessions’ losing streak as supported by a 1.3% rise in top lender Emirates NBD Bank and a 0.5% gain in Dubai Islamic Bank.
However, the Dubai index witnessed some price fluctuation due to investors’ cautious behaviour ahead of crucial U.S. non-farm payroll data, which will provide clues on the timing of the Federal Reserve’s rate cuts.
The U.S. non-farm payroll report for May due later in the day. Most stock markets in the Gulf were subdued on Thursday as investors turned cautious ahead of crucial U.S. job data this week for further clues on the timing of rate cuts by the Federal Reserve. Markets see a 70% chance of a September rate reduction, and have priced in about two cuts this year. Forecasters polled by Reuters also expect two cuts.
The U.S. non-farm payroll report for May due on Friday will provide more clues on the Fed’s rate trajectory.
Most Gulf currencies are pegged to the dollar, and any U.S. monetary policy change is usually followed by Saudi Arabia, the United Arab Emirates and Qatar.
The Abu Dhabi benchmark index eased 0.1%, after previous session gains. The conglomerate International Holding Co shed 0.3% and First Abu Dhabi Bank, the UAE’s largest lender, slipped 1.2%.
Dubai’s benchmark index fell marginally with the bluechip developer Emaar Properties sliding 1.3%, and Taxi Company dropping 2.7%. Tolls operator Salik Company, however, gained 1.8%. Saudi Arabia’s benchmark stock index bounced back from two consecutive sessions of losses and rose 0.1%, supported by finance stocks. Al Rajhi Bank, the world’s largest Islamic lender, rose 1.4% and Saudi Aramco added 0.4%.
Saudi Arabia’s sale of shares in oil giant Aramco drew more demand than the stock on offer within hours of offer on Sunday. The banks on the deal will take orders through Thursday and will announce final price on Friday.
Among other gainers, shares of Miahona Holding, the water and wastewater infrastructure firm, jumped 29.91% to 14.94 riyals compared to its IPO price of 11.50 riyals per share in its market debut. The Qatari benchmark index continued its upward trend for a sixth straight session, increasing by 0.4%, with broad sector gains. Qatar Islamic Bank added 0.7% and Qatar Fuel Co rose 1.4%.
Outside the Gulf, Egypt’s blue-chip index was down for a second straight session and ended 0.8% lower, with all sectors in the red. Eastern Company, the Egypt’s largest cigarettes maker, slumped 22.1% and E-Finance for Digital declined 6.3%.
Stock markets in the Gulf were mixed on Wednesday amid steady oil prices, while soft U.S. labor market data reaffirmed expectations of an interest rate cut by the Federal Reserve in September.
Oil prices, a catalyst for the Gulf’s financial markets, edged up 0.7% after hitting near four-month lows in the previous session, with Brent trading at $78.07 a barrel at 1300 GMT.
The Qatari benchmark stock index rose 0.3%, gaining for a fifth straight session, supported by a 1.9% increase in Industries Qatar and a 0.7% rise in Qatar Gas Transport.
Meanwhile, energy giant QatarEnergy signed a deal to supply Taiwan’s state-owned oil firm CPC with liquefied natural gas (LNG) for 27 years.
The Abu Dhabi benchmark index was up 0.3%, with Aldar Properties rising 2% and conglomerate International Holding Co (IHC) up 1.5% to 414.50 dirham per share, its highest level since listing in October 2005.