Mideast Stocks: Most Gulf Markets in Black on China Stimulus Prospect
Most stock markets in the Gulf ended higher on Monday, driven by China’s latest economic stimulus initiatives. This positive momentum came from the unveiling by China’s State Council of a “special action plan” designed to boost domestic consumption. The plan includes measures such as increasing residents’ income and establishing a childcare subsidy scheme. This action followed closely after the country’s financial regulator’s promise to relax consumer credit quotas and loan terms, aimed at providing long-term support by making available large financial resources.
Saudi Arabia’s benchmark index experienced a gain of 0.3%, marking an extension of gains for the second consecutive session. This was helped by a significant 2.5% rise in Saudi National Bank, the country’s largest lender. Alkhorayef Water and Power Technologies also made notable advances, climbing 4.4% following the announcement of a contract for the operation and maintenance of water treatment plants valued at 58.8 million riyals ($15.68 million).
The upward movement in oil prices, combined with China’s economic stimulus measures, has improved market sentiment. Additionally, the successful initial public offering of Arabian Company for Agricultural and Industrial Investment (Entaj) has added to investor optimism. Entaj saw a remarkable surge of 30%, reaching the maximum daily limit allowed for newly listed stocks during their first three days of trading, debuting at 65 riyals.
In Dubai, the main share index finished 0.6% higher, with the blue-chip developer Emaar Properties advancing by 3.1%. Meanwhile, in Abu Dhabi, the index increased by 0.3%. The slight rebound in oil prices appears to be providing some support to market sentiment, which could be further reinforced if oil markets experience a solid recovery.
Oil prices, a crucial factor for the Gulf’s financial markets, traded higher as the United States pledged to continue its attacks on Yemen’s Houthis until the Iran-aligned group ceases assaults on shipping. Additionally, favorable Chinese economic data has fueled hopes for increased demand.
The Qatari index, however, eased by 0.2%, primarily affected by a 1.2% decline in Qatar Islamic Bank. In contrast, Egypt’s blue-chip index closed 0.4% higher, with Commercial International Bank climbing 1.6%.
Here is a quick summary of the performances across various markets:
- Saudi Arabia gained 0.3% to reach 11,883
- Abu Dhabi rose 0.3% to hit 9,451
- Dubai added 0.6% to achieve 5,171
- Qatar eased 0.2% to settle at 10,404
- Egypt was up 0.4%, closing at 31,459
- Bahrain was slightly down 0.1% at 1,968
- Oman lost 0.1%, standing at 4,379
- Kuwait added 0.1% to finish at 8,430
The supportive measures and promising indicators from China offer a promising outlook for future growth, fostering an encouraging environment for investors in the region.
($1 = 3.7504 riyals)
