The Fed’s decisions have a strong influence on Gulf monetary policy, as most regional currencies are dependent on the US dollar.
As Gulf shares rise on the hope that US Federal Reserve policy will ease and the Egyptian stock market reaches a record high, the Middle East is gaining star power from investors as they seek opportunities amid a strong index and positive economic indicators. In such an environment, a wise investor would be compelled to find companies, such as those in the financial, infrastructure, and consumer sectors, that not only stand to gain from favorable monetary policies but also demonstrate resilience and grow within the evolving and competitive market.
On Tuesday, most Gulf equities mirrored the upward trend of global stocks as investors raised their bets that the US Federal Reserve will cut interest rates. This positive sentiment was even boosted higher by a series of positive corporate earnings within the region.
Expectations that the US central bank will ease monetary policy soon have intensified after the release of a very disappointing US job report, which has raised concerns about the health of the world’s largest economy.
Markets now see a 94% likelihood of a September rate cut, compared with 63% previously.
The Fed’s decisions have a strong influence on Gulf monetary policy, as most regional currencies are dependent on the US dollar.
The Qatari benchmark share index advanced 0.9% to 11,284, its highest level in over two and a half years, with all stocks advancing to positive territory. Shares of Qatar National Bank, the largest lender in the area, increased 1.2% and telecom service provider Ooredoo gained 3.5%.
Dubai’s benchmark stock index rose 0.7%. Emirates National Bank of Dubai (Emirates NBD), the largest lender, rose 1.9% and tolls operator Salik Company rose to 1.6%.
In separate news, Dubai’s non-oil sector made a notable recovery, as reflected in the rise in its Purchasing Managers’ Index to 53.5 in July from 51.8 in June, all thanks to an improvement in sales volume.
Saudi Arabia’s benchmark stock index increased by 0.8%, supported by a 3.1% increase in Saudi Basic Industries. ADES Holding rose by 10%, its highest intraday gain since its listing in 2023.
Oil drilling company ADES has made up its mind to purchase Oslo-listed competitor Shelf Drilling for Norwegian crowns ($379 million) in cash.
Among other notable gainers, Lumi Rental rose 3.5% after the auto rental company announced a 17.8% increase in its second-quarter net profit.
The Abu Dhabi benchmark index gained 0.3% after two consecutive losses. First Abu Dhabi Bank (FADB), the United Arab Emirates’ biggest bank, rose 2% and Abu Dhabi National Oil Company’s logistics division added 1.1%.
News outside the Gulf: Egypt’s blue-chip index rose for the fourth consecutive day, hitting a record high of 35,254, up 1.6%. Eastern Company jumped 5.5% and Talaat Moustafa Group rose by 0.7%.
In the meantime, Egypt’s non-oil private sector showed early signs of stabilisation in July, with employment increasing for the first time in nine months and a softer decline in output and new orders easing, as reported by the S&P Global Egypt PMI report.
Dubai Refreshment, an emerging player in the Middle East market, showed significant potential with its debt-free position and remarkable annual earnings growth of 24% over the last five years. Despite its share price being volatile recently, the company reported strong Q2 results for 2025, with sales reaching AED 238 million and net income at AED 48 million.
The earnings per share increased from AED 0.44 to AED 0.53. The company’s free cash flow is positive, which shows its financial stability and operational effectiveness in a competitive market where its trading is significantly below its estimated fair value.