Saudi bourse gains ahead of US rate cut decision; Dubai falls on tax concerns

Saudi Arabian stock market ended higher on Tuesday, as investors looked ahead to the U.S. Federal Reserve’s upcoming interest rate decision, while the Dubai bourse retreated on tax concerns.

Fed officials appear on track to cut interest rates this month after data showed the U.S. labor market remained strong but continued to cool in November.

The U.S. Fed started its interest rate easing cycle with an unusually large 50-basis-point cut in September, followed by a 25 bps cut in November. Traders are pricing an 86% chance of another quarter-percentage-point cut from the central bank at its Dec. 17-18 meeting.

The Fed’s decisions impact monetary policy in the Gulf region where most currencies, including Saudi Arabia’s, are pegged to the U.S. dollar.

Saudi Arabia’s benchmark index advanced 0.8%, led by a 0.4% rise in Al Rajhi Bank and a 1.2% increase in oil giant Saudi Aramco.

Dubai’s main share index retreated 1.1%, weighed down by a 2.7% fall in blue-chip developer Emaar Properties and a 1.6% decrease in toll operator Salik Co.

Most Gulf markets gain as investors await US inflation data

The United Arab Emirates starting in January will impose a minimum top-up tax (DMTT) of 15% on large multinational companies operating in the country, the finance ministry said on Monday, as the government seeks to boost non-oil revenue.

In the short term, a higher tax regime will inevitably impact profitability for businesses that were used to enjoying relatively lower taxes offered by the Gulf state, leading to a negative investor sentiment, said Bal Krishen, Chairman - Century Group.

Elsewhere, Talabat Holding tumbled 6.9% to 1.49 dirhams in debut trade.

Talabat Holding, one of the biggest food-ordering businesses in the Middle East, has raised about $2 billion from the largest initial public offering in the UAE this year.

In Abu Dhabi, the index closed flat.

Outside the Gulf, Egypt’s blue-chip index dropped 1.3%, as most of its constituents were in the negative territory, including top lender Commercial International Bank, which was down 1.5%.

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 SAUDI ARABIA    rose 0.8% to 12,194
 ABU DHABI       finished flat at 9,250
 DUBAI           fell 1.1% to 4,794
 QATAR           gained 0.7% to 10,496
 EGYPT           lost 1.3% to 30,618
 BAHRAIN         down 0.6% to 2,017
 OMAN            dropped 0.4% to 4,533
 KUWAIT          added 0.1% to 7,846
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