Dubai Index Outperforms Gulf Peers: Opportunities and Challenges for Upcoming Markets

Gulf stock indices rose yesterday, except for the Abu Dhabi FADX15 index. For example:

1. The Qatari GNRI index closed at 10,398 points, its highest level since March 5, 2024, but it remains down by about 4% since the beginning of the year up to yesterday’s close.
2. The Saudi TASI index closed at 11,842 points but is down by about 1% since the beginning of the year up to yesterday’s close.
3. The Dubai Financial Market DFMGI index closed at 4,365 points, up by about 8% since the beginning of the year up to yesterday’s close.
4. The Abu Dhabi FADX15 index closed at 9,210 points but is down by about 1% since the beginning of the year up to yesterday’s close.
5. The Kuwaiti BKP index closed at 7,748 points, up by about 3% since the beginning of the year up to yesterday’s close.

Thus, we observe that the Dubai Financial Market index has outperformed other Gulf indices since the beginning of the year up to yesterday’s session.

So, what are the main drivers for Gulf markets in the upcoming period?

• Crude Oil Prices: Recently, there have been significant fluctuations. On Tuesday, September 10, 2024, it recorded $68.71, its lowest level since December 2, 2021, and is currently hovering around $72.
• Monetary Policies: The policies adopted by the U.S. Federal Reserve, especially regarding interest rates, with bets on a 25 basis point rate cut in the upcoming meeting on Wednesday, September 18. Most Gulf currencies are tied to the U.S. dollar, and Gulf central banks—specifically Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait—follow the Fed’s lead in raising or lowering interest rates accordingly.
• Initial Public Offerings (IPOs) of Gulf Companies.
• Ongoing Geopolitical Tensions in the Middle East.ç

From a technical perspective, the outlook for the Dubai Financial Market (DFM) index appears positive, showing strong performance and sentiment during this period. After reaching its lowest point this year at 3,946 points on May 29, 2023, it has recovered to 4,365 points, an increase of about 11% from the low recorded (3,946 points) up to yesterday’s close. The index is trading above the 20, 50, and 200-day moving averages, indicating an upward trend. The Relative Strength Index (RSI) currently stands at 61 points, suggesting positive momentum for the Dubai Financial Market index.

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.