The UAE and Saudi stock markets opened the New Year in good spirits, with stock indexes in both countries rising modestly on the first day of trading despite worries that trade problems between the United States and China would have a negative impact on the global economy.
Monday, 2 Jan 2023 saw the Abu Dhabi stock market rise by 0.41%, with First Abu Dhabi Bank (NBAD) leading the way. Abu Dhabi National Energy (TAQA) ended the day up 2.33%, and Abu Dhabi Commercial Bank (ADCB) was up 0.58%, which also makes it the top performer on the regional market. Several large lenders raised their rates in the recent session, with ADCB’s rate going up to AED 9.050, and ADIB’s rate going up to AED 9.140.
Abu Dhabi’s stock market outperformed its GCC counterparts in 2022, rising more than 20% in the year’s final months. This performance was likely due to the region’s strong economic growth and increased investor confidence. In Dubai, Emaar stocks edged higher by 0.68% to close at AED 5.900, while Al Firdous Holdings was the best performer after increasing 8.53% to close at AED 0.140. The emirate’s main stock index closed down 0.15% at 3,330.900.
The Saudi Stock Exchange’s main index ended trading higher on Monday 2 Jan 2023, gaining 31.67 points to close at 10578.34 points, which resulted in a total value of trading of SAR 3.6B. On the other hand, the Saudi Parallel Market Index (NOMU) ended the day strongly increasing by 245.54 points, closing at 19,434.51 points, which resulted in a valuation of SAR 21M. In 2022, UAE’s financial markets saw 11 initial public offerings, which raised AED 51.2B and increased the depth of the country’s bourses, enhancing their investment potential and attracting a new segment of investors.
The IPOs in the UAE have had a positive impact on the region, as they have attracted a total demand of AED 1.454T. This has helped the UAE and the region become a bright spot in an otherwise bleak global IPO market. Several local companies are planning to list on the Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) in the next few years, as the UAE markets have shown resilience in the face of global volatility. This is in addition to the IPOs that took place in 2021, including Fertiglobe, ADNOC Drilling, Alpha Dhabi, and Multiply Group.
Dubai Electricity and Water Authority (DEWA) generated a revenue of AED 22.3B in its public offering, which was more than any other company. DEWA’s shares were available to the public at a price of AED 22.3B, representing 18% of the company’s total capital. Borouge, on the other hand, generated a revenue of over AED 7.34B in its public offering, which was also more than any other company.
Americana raised $6.62B in gross proceeds in its historic IPO on the ADX and Saudi Arabia’s Tadawul, while Abu Dhabi Ports succeeded in attracting new capital from the IPO with returns of $4B. Meanwhile, Dubai’s toll operator SALIK raised over AED 3.7B from its IPO on the DFM, while Empower raised AED 2.7B. TECOM Group raised AED 1.7B, Burjeel AED 1.1B, Taaleem AED 750M, and Bayanat AED 628M.
According to Bloomberg, there have been a lot of sales in the region this year, totalling $22.6B, and the number of regional IPO listings in the Middle East has increased recently because of high oil prices and increased investment. However, IPOs are having a tough time this year, and the number of listings is the lowest in a long time. This is because investors are less interested in companies that are growing quickly, because prices for goods and services are going up.
The US IPO market has been doing poorly recently, with volumes decreasing by a lot and being down 93% from last year. This is because a lot of the “blank check” deals that were popular in the past have stopped happening. Some bankers are predicting that investors will be more hesitant to invest in flotations next year, because there are a lot of stable companies that are available. Bankers say that two markets that did well in 2022 – China and the Middle East – are likely to continue to do so in 2023.
The FADX 15 Index (an indicator of the performance of the Abu Dhabi stock market) grew by 0.39% this week, thanks to increases of 1.6% and 1.65% in First Abu Dhabi Bank and Abu Dhabi Islamic Bank, respectively. While other markets were dropping, Dubai’s main stock market index (DFMGI) was falling because two other companies’ stocks were dropping too. The Gulf stock markets continued to go up on Wednesday, mainly because China repealed most of its tough COVID-19 restrictions.
On Wednesday, 28 December, 2022, the stock market in the United States and around the world fell because the yield on U.S. Treasury bonds went up, meaning that the money that investors are getting paid to hold these securities is higher than the amount of money they were paying a few weeks ago. This made the growth stocks (stock prices that are rising) more expensive, while the energy sector (stock prices that are related to oil) fell because oil prices went down.
The Abu Dhabi stock market started the year off well, with the main index advancing 0.408%. This was mainly due to First Abu Dhabi Bank (NBAD) and Abu Dhabi National Energy (TAQA), which ended the year up by 0.580% and 2.330%. The other banks ended the session higher by 0.560% and 0.330%.
The Abu Dhabi stock market outperformed other GCC markets in 2022, increasing in value by more than 20% in the final months of the year. Emaar and Al Firdous Holdings (a company that makes and sells goods) both rose in value on Thursday, 29 December, 2022, but the overall market trend was down. The Dubai Index (a measure of the overall stock market) ended the day down 0.155%.
The stock markets in the Gulf ended up going up on Wednesday, 28 December, 2022 because people were optimistic about the news that China was scrapping most of their stringent COVID-19 curbs. However, there were still some concerns about infections in China, so the gains were not completely permanent.
The Saudi stock market rose by 1.2% on Thursday, 29 December, 2022, thanks to strong performances by two different companies. Riyad Bank (an investment bank) saw its stock prices rise by 4.3%, while Dr. Sulaiman Al-Habib Medical Services (a healthcare company) saw its stock prices go up by 2.5%.
The Saudi bourse continued to rebound in April thanks to better prices for oil and a steady stream of initial public offerings. Although the stock market was down overall, some stocks were still falling in price due to uncertainties in the energy market. Shares of Saudi Aramco’s base oil subsidiary, Luberef, closed 4% lower on Wednesday, 28, December, 2022, below the listing price of SAR 95 in Riyadh.
In Abu Dhabi, the stock market index (FTFADGI) increased by 0.4%, thanks to a 1.6% rise in First Abu Dhabi Bank (FAB.AD). On Sunday, 1 January, 2023, the Saudi Arabian stock market rose, starting the year off on a positive note in line with the country’s economic forecast. Meanwhile, other major markets were closed for the year-end holidays, giving many investors an opportunity to take a break.
Reuters reported earlier that Saudi Arabia expects to have a budget surplus in 2023, though this is down 84% from the previous year due to the uncertain global economic outlook and lower crude prices. The kingdom approved a budget of SAR 1.114T for the year 2023; the budget is forecast to have a surplus of 0.4% of GDP, down from an expected 2.6% in 2022. In 2022, oil prices remained highly volatile, due to the war in Ukraine and on weaker demand from China, the region’s top importer. Meanwhile, growth in the region was largely fuelled by crude prices. The Saudi Arabian stock market rose by 0.7% on the day, with oil giant Saudi Aramco and Sulaiman Al-Habib Medical Services leading the charge. Saudi Aramco rose by 0.9% while Sulaiman Al-Habib Medical Services surged by 1%.
However, Dubai’s main stock index eased 0.1% Tuesday, 3 January, 2023, with losses seen in top lender Emirates NBD. Egypt’s blue chip stock market index finished the day 0.6% higher, with local investors continuing to be net buyers. Outside the Gulf, Egypt’s economy continued to improve, with both consumer prices and industrial production increasing. Meanwhile, the Euro area continued to struggle with its debt crisis, with Spain’s borrowing costs rising and Italy’s borrowing costs reaching new heights.
