Most stock markets in the Gulf ended higher on Sunday with Saudi Arabian shares snapping three sessions of losses, as soft U.S. inflation data fuelled hopes that the aggressive Federal Reserve rate stance might begin to ease.
Most Gulf Cooperation Council countries, including Saudi Arabia, United Arab Emirates and Qatar, have their currencies pegged to the dollar and generally follow the Fed’s policy moves, exposing the region to a direct impact from monetary tightening there.
Saudi Arabia’s benchmark index pared some gains to close 0.3% higher, ending three sessions of losses, helped by a 3.1% jump in Saudi National Bank (SNB).
SNB, the country’s biggest lender, said on Friday it had not come across any information that might raise concerns over the governance of Credit Suisse and was supportive of the transformation plan announced by the bank on Oct. 27.
Saudi National Bank has agreed to invest 1.5 billion Swiss francs ($1.59 billion) in the Swiss lender and is set to take a stake of up to 9.9%.
Elsewhere, oil giant Saudi Aramco gained 0.6%.
Oil prices - a key catalyst for the Gulf’s financial markets - settled higher on Friday but fell week-on-week after health authorities in China eased some of the country’s heavy COVID-19 curbs, raising hopes for improved economic activity and demand in the world’s top crude importer.
Most Gulf bourses in red on falling oil prices
However, stock exchange operator and owner Saudi Tadawul Group plunged 9.9% to 188.8 riyals, after the kingdom’s Public Investment Fund sold a 10% stake in the firm through a secondary share offering.
PIF sold 12 million shares through an accelerated book build offering at 191 riyals each, a 9% discount to their previous closing price, raising 2.3 billion riyals ($612 million).
In Qatar, the index added 0.4%, led by a 1.2% rise in petrochemical maker Industries Qatar and a 1.4% increase in Qatar Fuel Co.
The Qatari stock market started the week positively as the world cup could provide strong support for the market and attract investors’ attention, said Farah Mourad, Senior Market Analyst of XTB MENA.
“At the same time, the market remains exposed to volatility in natural gas prices.”
Outside the Gulf, Egypt’s blue-chip index gained 1.9%, as most of the stocks on the index were in positive territory.
According to analyst Mourad, the Egyptian stock market continues to benefit from the attention COP27 brought to the country.
SAUDI ARABIA rose 0.3% to 11,247
QATAR gained 0.4% to 12,610
EGYPT up 1.9% to 11,981
BAHRAIN was up 0.1% to 1,868
OMAN gained 1% to 4,472
KUWAIT added 1.2% to 8,558
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