Saudi Arabia’s PMI rises to 6-month high in October

RIYADH: The Saudi stock market was among the Arab region’s top performers in December, with the Tadawul index rising 3.39 percent amid improved liquidity and investor confidence, a new report showed. 

At the end of the final month of 2024, TASI closed at 12,037 points, with an average daily trading value of SR5.2 billion ($1.3 billion), bringing the total monthly trading value to SR119.6 billion, according to the Arab Monetary Fund. 

Dubai Financial Market led the regional surge with its DFMGI index rising by 6.42 percent, making it the best-performing exchange during the month. It was followed by the Palestinian and Iraqi stock exchanges, which registered gains of 4.85 percent and 4.14 percent, respectively. 

This helped the AMF’s composite index for Arab financial markets post a 1.03 percent increase in December, as most regional stock markets ended the year on a positive note. The market rally was fueled by improved investor sentiment, easing inflationary pressures, and monetary policy adjustments across several economies. 

Arab markets largely followed the performance of emerging markets. The MSCI Arab Index, which tracks the performance of stock exchanges in the region, increased by 3.46 percent. 

In contrast, global markets showed mixed results. The Nikkei 225 rose by 4.41 percent, while indices such as the FTSE 100 and Dow Jones recorded declines of 1.38 percent and 5.27 percent, respectively.  

Other key regional markets that saw growth included the Abu Dhabi, Kuwait, and Qatar stock exchanges. 

Meanwhile, some markets saw declines, with the Damascus Securities Exchange registering the sharpest drop of 7.64 percent, followed by the Bahrain Bourse at 2.27 percent and the Egyptian Exchange at 1.66 percent.  

In terms of market capitalization, Arab exchanges witnessed a 2.96 percent increase by the end of December, bringing the total market value to approximately $4.4 trillion. Tadawul played a major role in this growth, contributing 1.47 percentage points to the overall market capitalization increase. 

The Beirut Stock Exchange recorded the largest percentage gain at 22.37 percent in market capitalization, followed by Dubai Financial Market at 13.54 percent and the Palestine Stock Exchange at 5.35 percent. 

On the other hand, the Damascus Securities Exchange suffered the most significant decline at 7.40 percent, with the Bahrain and Casablanca exchanges also experiencing contractions.  

Trading activity in the Arab financial markets also saw a sharp increase, with the total value of traded stocks rising by 25 percent compared to November levels. 

The Egyptian Exchange led in trading volume growth, with an increase of 116.74 percent, while the Casablanca and Tunis stock exchanges recorded gains of 199.83 percent and 330.59 percent, respectively. 

However, not all markets shared this momentum, as some, including the Damascus and Abu Dhabi stock exchanges, recorded declines in traded volumes.  

Monetary policy adjustments played a crucial role in market performance. Several central banks in Arab and global markets eased their monetary policies in December, further supporting market liquidity. 

The US Federal Reserve’s decision to cut interest rates led to similar actions in Saudi Arabia, the UAE, Qatar, and Bahrain, among others. The Turkish and Argentine central banks also made significant rate cuts to address domestic economic conditions. 

The overall monetary easing environment contributed to strengthening investor sentiment and boosting equity market performance, the report said. 

TOKYO: Oil prices were little changed on Thursday as markets braced for threatened tariffs by US President Donald Trump on Mexico and Canada, the two largest suppliers of crude oil to the US, and awaited a meeting of OPEC+ producers.

Brent crude futures were down 7 cents, or 0.1 percent, at $76.51 a barrel by 7:11 a.m. Saudi time. US crude futures were little changed at 2 cents up, or 0.03 percent, to $72.64. US crude futures had settled at their lowest price this year on Wednesday.

Trump still plans to make good on his promise to impose tariffs on Canada and Mexico on Saturday, White House spokeswoman Karoline Leavitt told reporters on Tuesday.

Trump’s nominee to run the Commerce Department, Howard Lutnick, said on Wednesday that Canada and Mexico can avoid the tariffs if they act swiftly to close their borders to fentanyl, while vowing to slow China’s advancement in artificial intelligence.

On the demand front, crude oil stockpiles in the US rose by 3.46 million barrels last week, roughly in line with analysts’ estimate for a rise of 3.19 million barrels, as winter storms that swept the country last week hit demand.

On the supply side, crude oil exports from Russia’s western ports in February are set to fall by 8 percent from the January plan as Moscow boosts refining, traders said and Reuters calculations showed, after the latest US sanctions squeezed crude exports.

Investors are also looking ahead to a ministerial meeting by the Organization of the Petroleum Exporting Countries and its allies, together called OPEC+, scheduled for Feb. 3.

The OPEC+ group of leading oil producers is set to discuss Trump’s efforts to raise US oil production and take a joint stance on the matter, Kazakhstan said on Wednesday. Russia is also a member of the OPEC+ group.

Trump has publicly called on OPEC to lower oil prices, saying doing so would end the conflict in Ukraine. He has also set up an agenda of maximizing the US oil and gas production, already the world’s largest.
However, analysts believe a price war between the US and OPEC+ is unlikely as it may hurt both.

“A price war with the US would involve OPEC+ producers maximizing their output to undercut prices and drive shale production into decline,” analysts at BMI, a Fitch Group division, said in a note.

They predict Brent crude oil prices may go down below $50 as OPEC+ can deploy over 5 million barrels of oil per day in its spare capacity, prompting a fall in the US shale oil production along the prices.