Gulf Markets Show Mixed Results; Egypt Hits Record High Following IMF Agreement

On Thursday, Gulf stock markets displayed a mixed response to U.S. Federal Reserve Chair Jerome Powell’s remarks on monetary policy, while Egypt’s bourse surged to a record high following the country’s International Monetary Fund (IMF) deal.

Powell’s statement on Wednesday, cautioning that continued progress on inflation is not guaranteed, impacted market sentiment, despite the U.S. central bank’s plans to reduce its benchmark interest rate later this year.

Given that most regional currencies in the six-member Gulf Cooperation Council are pegged to the U.S. dollar, monetary policy decisions often mirror those of the Federal Reserve.

Saudi Arabia’s benchmark index saw a marginal uptick of 0.1%, supported by a notable 5.5% increase in Avalon Pharma’s shares. Market volatility persisted following two consecutive days of gains, with mixed performances observed among major stocks, particularly within the banking sector.

Dubai’s primary share index experienced a 0.3% decline, primarily influenced by an 8% drop in Dubai Islamic Bank’s shares as the lender traded ex-dividend.

In Qatar, the benchmark index dropped by 0.7%, impacted by significant declines in petrochemical maker Industries Qatar and telecoms firm Ooredoo, both trading ex-dividend. Meanwhile, Egypt’s blue-chip index surged by 5.2%, led by a robust 9.5% rise in shares of top lender Commercial International Bank. Egypt’s market rally follows the country’s securing of an expanded $8 billion deal with the IMF, coupled with significant monetary policy measures implemented by the central bank to stabilize the economy, including a substantial rate hike of 600 basis points.”