Oil prices set to snap two-day winning streak ahead of Fed decision

RIYADH: Saudi Arabia’s Tadawul All Share Index closed Wednesday’s trading session in positive territory, rising 17.61 points to reach 11,634.42, an increase of 0.15 percent.

The total trading turnover on the main index stood at SR5.79 billion ($1.54 billion), with 109 stocks advancing while 131 declined.

The MSCI Tadawul 30 Index also posted gains, climbing 6.2 points, or 0.42 percent, to end the day at 1,479.9.

Meanwhile, the Kingdom’s parallel market, Nomu, recorded a slight dip, falling 57.73 points—or 0.2 percent—to close at 29,083.57. Thirty stocks advanced on the parallel market, while 42 closed lower.

Lazurde Company for Jewelry led the gains on the main index with a sharp rise of 10 percent, closing at SR14.08. Saudi Industrial Export Co. followed, increasing 9.69 percent to SR2.49. Shares of Mobile Telecommunication Company Saudi Arabia advanced 5.65 percent to SR13.08.

Saudi Real Estate Co. also recorded a notable uptick, with its shares climbing 4.88 percent to SR23.20, while Takween Advanced Industries Co. rose 4.78 percent to close at SR9.20.

On the other end of the spectrum, Al Mawarid Manpower Co. was the day’s worst performer on TASI, with its shares dropping 4.93 percent to SR142.60. City Cement Co. fell 4.56 percent to SR20.10, and Umm Al-Qura Cement Co. declined 3.96 percent to SR17.94.

On the Nomu market, Watani Iron Steel Co. emerged as the top gainer, with its share price climbing 7.14 percent to SR2.40. Hedab Alkhaleej Trading Co. and Knowledge Tower Trading Co. also performed well, with their shares increasing by 5.61 percent and 4.62 percent to close at SR43.30 and SR13.60, respectively.

Other notable gainers included Nofoth Food Products Co. and Knowledge Net Co.

On the losing side, Jana Medical Co. posted the steepest decline on Nomu, with shares dropping 8.53 percent to SR19.30. Almuneef Co. for Trade, Industry, Agriculture and Contracting fell 8.02 percent to SR7.45, while Horizon Educational Co. slipped 7.67 percent to SR83.

RIYADH: Despite rising global trade tensions and heightened market volatility, banks across the Gulf Cooperation Council are expected to remain resilient, according to a recent report by S&P Global Ratings.

In its analysis titled “GCC banks can cope with the fallout from intensifying trade tensions,” the ratings agency pointed to the region’s strong financial fundamentals as a key buffer against economic uncertainty stemming from evolving US tariff policies and global investor jitters.

S&P highlighted investor risk aversion and market volatility as the most immediate threats, but noted that Gulf banks are well-positioned to absorb potential shocks. “GCC banks appear to be in a good position to withstand these threats,” the report stated, citing robust liquidity levels, solid profitability, and healthy capitalization as major strengths.

While the direct impact of trade tensions on GCC economies is expected to be limited—due in part to their relatively low export exposure to the US — the report warned of more significant indirect effects. In particular, a sustained decline in oil prices could weigh on fiscal spending and economic sentiment across the region. S&P has revised its assumed oil price forecast for 2025 to $65 per barrel.

“A prolonged period of lower oil prices could lead to reduced government spending, dampen business confidence, and potentially trigger an uptick in non-performing loans,” the report noted.

To gauge the sector’s resilience, S&P conducted stress tests modeling severe scenarios, including sharp capital outflows and a surge in NPLs. Even under a worst-case scenario—where NPLs increase by 50 percent—the top 45 banks in the GCC would face cumulative losses of $30.3 billion, significantly lower than their combined projected net income of $60 billion in 2024.

The findings reinforce the region’s financial stability amid global economic headwinds, underlining the strength of its banking sector even in the face of mounting external pressures.

“Even in our worst-case scenario, we still expect the shock to affect banks’ profitability rather than their solvency,” the report noted.  

Qatari banks were identified as more vulnerable due to their net external debt position, but strong government support mitigates risks. In contrast, UAE banks exhibit the highest resilience, thanks to their robust net external asset position.  

The report also pointed to regulators’ proactive measures as a critical factor. During the COVID-19 pandemic, forbearance policies helped banks navigate uncertainty, and similar actions are expected if trade tensions escalate further.   

While challenges loom, GCC banks enter this period of uncertainty from a position of strength. “Banks continue to display strong capitalization, with an average Tier 1 capital ratio of 17.2 percent at year-end 2024,” S&P noted.

The combination of solid fundamentals and potential regulatory backstops suggests the sector is prepared to weather the storm.