Gulf equities ended mostly lower on Wednesday, with Saudi Arabia leading the losses amid volatile oil prices on demand worries, although Abu Dhabi edged up.
Oil prices, a key driver for financial markets in the Middle East, fluctuated wildly on Wednesday as the market balanced demand worries related to looming recession risks with fears that Russia will halt all oil and gas supplies.
Most Gulf Cooperation Council countries (GCC), including the United Arab Emirates, have their currencies pegged to the dollar and generally follow the Federal Reserve’s policy moves, exposing the region to a direct impact from any monetary tightening by the U.S. central bank.
Saudi Arabia’s benchmark index fell 1.1%, extending losses to a third consecutive session, pressured by real estate and financial stocks. Luxury developer Retal Urban Development Company slid 1.9% and lender Al Rajhi Bank was down 0.8%.
In Qatar, the benchmark index, was down 0.8%, declining for the eight time out of last nine trading sessions. Petrochemical makers Industries Qatar and Ooredoo fell 1.7% and 2.4%.
Qatari stock market retreated as it was pulled by declining natural gas prices. The uncertainty around energy products could continue to impact the main index strongly, said Ahmed Fouad at Emporium Capital.
Gulf markets set for modest upswing on output cut, PMI data
Meanwhile, Qatar’s central bank on Tuesday told banks in the Gulf state not to exchange its currency with entities outside the country without prior permission, in a move aimed at ending the riyal’s divergence against the dollar.
The notice said banks should seek permission from QCB before conducting any such transactions.
In Dubai, the main share index edged down 0.4%, with losers outnumbering gainers, hit by a 1.8% slump in blue-chip developer Emaar Properties and a 2.3% dive in Air Arabia.
A Reuters poll published on Sept. 5 said property prices in Dubai will rise this year and next at a slower pace than previously thought as higher mortgage rates and the cost of living crisis will reduce foreign demand.
Analysts said the recovery was fragile and uneven, and an oversupply of residential properties along with rising interest rates would pressure prices over the coming months.
In Abu Dhabi, the index added 0.6%, buoyed by the country’s largest lender First Abu Dhabi Bank, which was up 0.8%. Conglomerate International Holding Company inched up 2.6% after its listed unit Al Seer Marine announced a collaboration agreement with Singapore-based Netbulk PTE to expand its worldwide freight services.
Outside the Gulf, Egypt’s blue-chip index was down 0.9%, loosing the ground after a three-day rally as traders moved to secure their gains. E-payment platform Fawry For Banking Technology and Electronic Payment dropped 2.4%, and E-Finance declined 3.4%.
================================================ SAUDI ARABIA declined 1.1% to 11,864 points ABU DHABI rose 0.6% to 9,717 points DUBAI was down 0.4% to 3,382 points QATAR dropped 0.8% to 12,955 points EGYPT fell 0.9% to 10,232 points BAHRAIN edged up 0.2% to 1,925 points OMAN declined 0.5% 4,522 points KUWAIT lost 0.5% to 8,447 points================================================