Gulf Markets on Hold as U.S. Inflation Looms

Dubai, UAE - February 28, 2024 - On Wednesday, As investors awaited important US economic data, namely the January Personal Consumption Expenditures Price Index (PCE), most Gulf stock markets moved calmly. Due to their dollar-pegged currencies, the Gulf countries' economy are affected by interest rate hikes by the Federal Reserve, which may be influenced by this significant inflation index that was released on Thursday.

The losses at Al Rajhi Bank and the petrochemical giant SABIC offset the gains from the recently listed pharmaceutical company Avalon Pharma, which caused a modest decline in the Saudi benchmark index, or TASI. SABIC recorded a net loss for 2023 owing to terminated operations, whereas Avalon Pharma saw a good second trading day, rising over 30%.

Similar patterns were seen in Abu Dhabi and Qatar. The Abu Dhabi index (FTFADGI) dipped slightly, while the Qatari index (QSI) slipped lower, led by Qatar Islamic Bank.

However, Dubai's main index (DFMGI) defied the trend, rising modestly on the back of a 3.2% jump in Union Properties following their recent land sale and ongoing asset review. Additionally, Dubai announced its first privatization deal of 2024, offering a 24.99% stake in public parking operator Parkin through an initial public offering.

All eyes now turn to the PCE data release on Thursday, which will guide investor sentiment and potentially influence future market movements in the Gulf region.