GCC markets provide strong hedge against global economic chaos

Karim Awad, group chief executive of EFG Holding, speaks at the 19th Annual EFG Hermes One-on-One Investor Conference in Dubai on Monday. Photo/Supplied
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Updated 07 April 2025
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GCC markets provide strong hedge against global economic chaos

  • EFG Hermes forecasts strong growth citing strategic diversification

DUBAI: Amid the ongoing global economic turbulence, the Gulf Cooperation Council region has demonstrated resilience, emerging as a dynamic hub. Its capital markets have weathered challenges, from US tariff shocks to fluctuations in oil prices, according to the group chief executive of EFG Holding.

In an interview with Arab News at the 19th Annual EFG Hermes One-on-One Investor Conference in Dubai, Karim Awad highlighted the region’s solid fundamentals, emphasizing that concerns over external shocks often overshadow its long-term growth potential.

“You’re seeing more IPOs coming to the region, and more sectors that are being represented on different exchanges, and this is all a reflection of the dynamism of the region as a whole,” Awad said.

Dismissing concerns over the effects of new US tariffs, Awad told Arab News that that the 10 percent tariff “is not a massive game-changer,” especially compared to the situation with China, but the panic tends to spread.

This optimism persists despite the global uncertainty, which includes rising US-China trade tensions, volatile oil prices, and ongoing geopolitical conflicts. However, Awad stressed that the GCC’s young, tech-savvy population and ongoing efforts toward economic diversification are unlocking unprecedented opportunities for growth.

“Investors are interested in a multitude of sectors. You have a young region, very dynamic technologies coming through today, a lot of tech companies. They like to see the different sectors that are coming from the region,” he said.

Away said the investors value the increasing economic diversification, as it’s not just about oil and gas, which is often the misconception. There is much more to offer, the top executive added.

Saudi Arabia’s diversification plans

Ahmed Shams, the head of research at EFG Hermes, an EFG Holding company, shared Awad’s optimistic views, particularly regarding Saudi Arabia.

Shams explained to Arab News that the Saudi market is driven by two key factors. The first is the transformation and economic diversification plans, and the second is the depth of the financial market, along with the crucial role of capital markets in funding these transformation efforts.

He acknowledged that oil price volatility could cause potential delays in Vision 2030 projects but emphasized that the long-term direction remains unchanged.

“There is no turning back, meaning that this will not derail the economic reform and the economic diversification program in Saudi Arabia. It could lead to some delays and reprioritization and recalibration,” he said.

Shams was particularly optimistic about the Saudi real estate sector. “The demand is huge. But there is an imbalance in the supply and demand, and this is a golden opportunity,” he said, adding that “90 percent of the announced projects, whether they’re PIF-owned or even the private sector players, will not be impacted.” 

Shams also expressed a positive outlook on utilities companies in the Kingdom and shared similar optimism about the banking sector.

“I would say even before the crisis, the valuation was very reasonable to see a bank in Saudi trading almost at book value. This is very interesting.”

Egypt’s reform story

Awad highlighted Egypt’s progress in fintech. “In Egypt, we have one of the best fintech companies, which is Valu, a company that offers buy now, pay later services. It is a company that we started from scratch and pretty much revolutionized the buy now, pay later market in Egypt,” he said.

Mohamed Ebeid, Co-CEO of EFG Hermes, highlighted the firm’s growth in the equity capital markets, noting that EFG Hermes executed deals worth $20 billion last year.

“This is 14 deals in terms of ECM (equity capital market), be it IPOs or accelerated book builds or FMOs (financial market operations),” he told Arab News.

However, the top official noted Saudi Arabia’s challenges in allocating shares to foreign investors due to oversubscription. “International investors are not getting the allocations that they ask for. It’s because there’s oversubscription, that’s No.1. No.2 , the banks, we do the recommendation for the issuer, but the issuer decides and has the final say,” Ebeid explained.

Egypt’s economic resilience was a key focus, with the country’s deputy governor of the central bank, Rami Aboulnaga, outlining the nation’s proactive approach to managing global shocks.

“We’ve been building these buffers throughout the past years to ensure we can immune ourselves and minimize damage from these types of crises,” he stated in a panel discussion during the conference, highlighting Egypt’s transition from a  $29 billion net foreign asset deficit to a  $10 billion surplus since January 2024.

Aboulnaga emphasized that although global trade slowdowns may affect Suez Canal traffic, Egypt’s diversified strategy — where only 7 percent of total trade volume is tied to the US — provides a level of insulation.

He described the foreign exchange market as functioning as a “shock absorber,” enabling real-time adjustments that help prevent structural imbalances.

The deputy governor particularly stressed the importance of policy sustainability, highlighting that February’s inflation drop to 12.8 percent validated Egypt’s orthodox policy mix. He also noted that upcoming reviews by the International Monetary Fund would further solidify the country’s reforms.

“What we’re seeing is very healthy and sustaining it is quite possible because you avoid these one-off hits,” Aboulnaga said.

Dubai’s accessibility boom

The conference’s panel discussions reinforced these themes, with Dubai’s leaders highlighting the emirate’s booming real estate sector and investor-friendly policies.

The CEO of Dubai Economic Development Corp., Hadi Badri, said: “The real estate investment market continues to be very strong. Last year, it grew in terms of value by 27 percent. Coincidentally, that’s the same rate of growth that the Dubai Financial Market index also grew.”

He added that demand continues to outstrip supply. “Our biggest constraint today in Dubai, to be able to attract as many businesses as we are able to attract, is office space,” Badri said.

The CEO of Dubai Financial Market and Nasdaq Dubai, Hamed Ali, emphasized the efforts to attract foreign investors. He reported that last year, the market gained 437,000 new investors, with about 85 percent of them coming from outside the UAE. He shared this during a panel discussion at the event.

Global headwinds

Despite the regional optimism, speakers acknowledged global challenges, such as US tariffs and the potential for stagflation. However, they argued that the MENA region remains relatively insulated from these issues.

Shams told Arab News that the impact had been evident on global trade and the inflation the world experienced post-COVID. He explained that part of this was due to the injection of money supply, while another part was attributed to supply chain disruptions and the reconfiguration of the global grid.

As the conference concluded, EFG Hermes leaders emphasized a unifying message: the MENA region’s story remains intact. While volatility may persist, they argued that strategic positioning — whether in Saudi megaprojects, Egyptian fintech, or Dubai’s property market — provides a hedge against global chaos.

“You should start deploying the market,” Ebeid urged investors, capturing the event’s defiant optimism.


Closing Bell: Saudi Arabia’s TASI ends higher in green at 110,914

Updated 30 July 2025
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Closing Bell: Saudi Arabia’s TASI ends higher in green at 110,914

  • MSCI Tadawul Index rose 0.93% to close at 1,407.08
  • Parallel market Nomu gained 0.31% to close at 26,809.08

RIYADH: Saudi Arabia’s Tadawul All Share Index closed Wednesday’s trading session higher at 10,914.38, marking an increase of 90.47 points, or 0.84 percent. 

The total trading turnover of the benchmark index reached SR4.32 billion ($1.15 billion), with 145 stocks advancing and 100 declining. 

The MSCI Tadawul Index also rose, climbing 13.03 points, or 0.93 percent, to close at 1,407.08. 

The Kingdom’s parallel market Nomu gained 83.19 points, or 0.31 percent, to close at 26,809.08. A total of 35 stocks advanced, while 36 retreated. 

Thimar Development Holding Co. was the session’s top performer, with its share price rising 10 percent to close at SR34.98. 

Other notable gainers included ACWA Power Co., which rose 5.92 percent to SR223.50, and Halwani Bros. Co., up 4.38 percent to SR43.82. 

Tanmiah Food Co. also posted gains, with its share price increasing 4.30 percent to SR91. 

Sport Clubs Co. recorded the steepest decline, with its shares falling 7.17 percent to SR10.23. 

Nahdi Medical Co. followed with a 5.53 percent drop to SR123.10, after announcing a 3.8 percent year-on-year decline in net profit to SR238.4 million for the second quarter ending June 30. 

The company said on Tadawul that the drop in profit was primarily due to increased discounts and promotional offers by its Egyptian subsidiary to enhance competitiveness amid currency fluctuations.

Higher selling and distribution expenses related to new product marketing also weighed on earnings. 

BAAN Holding Group Co. declined 4 percent to close at SR2.40. 

Specialized Medical Co. posted a loss of 3.78 percent, closing at SR19.60, while Alandalus Property Co. declined 2.45 percent to SR19.53. 


Education spending drives Saudi POS transactions to $3.16bn 

Updated 30 July 2025
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Education spending drives Saudi POS transactions to $3.16bn 

  • Education sector recorded SR111.18 million in transaction value
  • Overall POS transactions across all sectors declined 2.9% to 206.46 million

RIYADH: Education spending in Saudi Arabia increased by 3.6 percent in the week ending July 26, driving total point-of-sale transactions to SR11.87 billion ($3.16 billion), even as most other sectors saw declines. 

Total POS value remained above the $3 billion mark for the fifth consecutive week despite a 2.7 percent weekly drop, underscoring the resilience of consumer activity across the Kingdom, according to data from the Saudi Central Bank, also known as SAMA. 

The education sector recorded SR111.18 million in transaction value, with the number of transactions slipping 4.1 percent to 140,000, while overall POS transactions across all sectors declined 2.9 percent to 206.46 million. The hotels sector saw a 1.3 percent increase to SR291.07 million. 

On July 29, the Saudi Cabinet approved the new statistics law, enhancing the Kingdom’s POS reporting with more detailed retail market insights. This update introduces refined subcategories in POS data, improving transparency and supporting data-driven decision-making in line with Vision 2030. 

According to SAMA’s bulletin, the subcategory of books and stationery saw the largest decrease, dropping by 5.8 percent to SR98.11 million. Spending on airlines ranked next, dropping 5.6 percent to SR65.20 million. 

Food and beverages, the sector with the biggest share of total POS value, recorded a 1.8 percent decrease to SR1.70 billion, while the restaurants and cafes sector saw a 2.4 percent decrease, totaling SR1.55 billion and claiming the second-biggest share of this week’s POS. 

Spending on transportation ranked third despite a 2.2 percent decline to SR945.76 million. 

The top three categories accounted for approximately 35.3 percent of the week’s total spending, amounting to SR4.19 billion. 

The smallest decline was seen in spending on freight transport, postal and courier services which decreased by 0.9 percent to SR36.13 million, followed by expenditure on telecommunication, which saw a 1 percent dip to SR131.86 million. 

Geographically, Riyadh dominated POS transactions, with expenses in the capital reaching SR4.1 billion, a 2.7 percent decrease from the previous week.  

Jeddah followed closely with a 3.1 percent dip to SR1.70 billion, while Dammam ranked third, down 2.8 percent to SR566.81 million. 

Al-Jubail saw the smallest increase, inching up 0.6 percent to SR123.04 million, followed by Al-Baha with a 0.7 percent increase to SR76.12 million. 

Hail recorded 3.54 million deals in transaction volume, down 3.2 percent from the previous week, while Tabuk reached 3.93 million transactions, dropping 4.3 percent. 


Egypt’s Suez Canal Economic Zone revenues jump 38% YoY despite traffic downturn

Updated 30 July 2025
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Egypt’s Suez Canal Economic Zone revenues jump 38% YoY despite traffic downturn

RIYADH: Egypt’s General Authority for the Suez Canal Economic Zone reported a 38 percent year-on-year increase in revenue in the fiscal year 2024/25, reaching 11.43 billion Egyptian pounds ($234 million).

According to a statement from the Egyptian Cabinet, the authority also recorded a surplus of 8.49 billion pounds during the same period, SCZONE Chairman Walid Gamal El-Din told Prime Minister Mostafa Madbouly during a meeting to review the zone’s performance and investment pipeline. 

The growth comes despite a steep downturn in traffic through the Suez Canal, which saw revenues decline 54.1 percent to $2.6 billion between July 2024 and March, as ongoing Red Sea tensions triggered a 44.8 percent drop in ship transits. 

The increase aligns with SCZONE’s objective to attract regional businesses by offering streamlined access to local markets and talent, along with value-driven industrial parks that support integrated supply chains. 

In a statement posted on its official Facebook page, the Cabinet said the SCZONE chairman noted that “the authority’s promotional efforts contributed to achieving actual contracts for industrial, service, and logistics projects worth $7.09 billion for 286 projects, in addition to seaport projects worth $1.5 billion for 11 projects, for a total of $8.6 billion for 297 projects.” 

SCZONE Chairman Walid Gamal El-Din, third from left, listens to Prime Minister Mostafa Madbouly, centre. Egypt Cabinet/Facebook

During the meeting, Gamal El-Din highlighted progress in two key industrial areas. In Ain Sokhna, the zone attracted foreign investment in sectors such as renewable energy, electronics, pharmaceuticals, automotive components, and metal manufacturing. 

Meanwhile, the Qantara West zone saw the implementation of 31 projects spanning 2 million sq. meters, with a combined investment of $799 million, expected to generate 45,000 job opportunities. 

Gamal El-Din also outlined how the authority aims to attract new projects in industrial and service sectors such as technology and semiconductors, electronics, engineering equipment and machinery, photovoltaic solar cells, vocational training centers, and silica sand mining and raw materials industries. 

He added that the authority has already secured $43 million in foreign investment in silica mining and modern building materials. 

As part of these efforts, the SCZONE chairman noted that a promotional tour across several Chinese provinces was conducted to attract new foreign direct investment. The visit included high-level meetings with major Chinese firms and culminated in the signing of six new industrial project contracts in the textile and garments sector, valued at a combined $117.5 million. 

The deals represent a strategic step toward deepening economic ties with China and expanding Egypt’s manufacturing base, the statement added.


Boursa Kuwait net profit surges 61% in H1 

Updated 30 July 2025
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Boursa Kuwait net profit surges 61% in H1 

RIYADH: A rise in operating revenues and profitability drove Boursa Kuwait’s net profit to 15.11 million Kuwaiti dinars ($49.4 million) in the first half of 2025 — a 61.12 percent annual increase.

The growth was underpinned by a 41.13 percent year-on-year rise in total operating revenues to 24.20 million dinars, alongside a 59.53 percent boost in operating profit to 18.47 million dinars, according to a release. 

Earnings per share surged in tandem, rising from 46.71 fils to 75.27 fils by June 30, while total assets reached 123.87 million dinars, reflecting a 9.26 percent increase year-on-year. 

Shareholders’ equity attributable to equity holders of the parent company climbed 12.68 percent to 66.20 million dinars. 

The Boursa’s growth aligns with the World Bank’s forecast for Kuwait’s non-oil sector, which is expected to expand by 1.6 percent in 2025, supported by renewed real credit growth and large-scale infrastructure projects such as the Northern Special Economic Zone and Silk City. 

Boursa Kuwait Chairman Bader Al-Kharafi said: “These results reaffirm Boursa Kuwait’s capacity to navigate the complex geopolitical and economic challenges experienced worldwide while maintaining sustainable growth supported by revenue diversification and enhanced liquidity levels.” 

He added: “This growth marks a significant milestone in our journey, giving us greater momentum to advance our development plans to modernize market infrastructure, diversify investment instruments and strengthen its appeal to both local and international investors.” 

While the oil sector is projected to rebound with 2.2 percent real growth as OPEC+ production cuts ease from May, the broader fiscal outlook remains mixed, with the fiscal deficit forecast to widen to approximately 7.2 percent of gross domestic product due to weaker oil revenues. 

The performance coincides with major enhancements introduced under Part Two of Phase Three of the Market Development Program, a collaborative initiative involving Boursa Kuwait, the Capital Markets Authority, and Central Bank of Kuwait, as well as Kuwait Clearing Co., local banks, and investment and brokerage firms. 

Al-Kharafi credited the achievement to “seamless collaboration across the capital market apparatus and a shared determination to create tangible value for investors,” affirming the company’s commitment to “delivering transformative milestones that secure the long-term sustainability of the national economy.” 

He also emphasized the role of the private sector, noting that this breakthrough “underscores the private sector’s agility and effectiveness in advancing development and forging impactful partnerships with the public sector.” 

He extended his gratitude to stakeholders, including shareholders, executive management, regulatory authorities, and investors, stating: “Our commitment to deliver a superlative investment experience remains unwavering.” 

The Kuwaiti capital market recorded a surge in activity during the first half of 2025, with traded value jumping 90.39 percent to 12.63 billion dinars, while traded volume rose 82.95 percent to 49.45 billion shares. 

Market capitalization reached 50.53 billion dinars, a 23.20 percent increase year on year. 

The “Premier” Market contributed significantly with traded value up 47.09 percent to 7.34 billion dinars and market capitalization up 24.45 percent to 42.27 billion dinars. 

Meanwhile, the “Main” Market posted a 221.36 percent rise in traded value to 5.29 billion dinars, alongside a 17.20 percent growth in market capitalization to 8.27 billion dinars. 

Boursa Kuwait CEO Mohammad Saud Al-Osaimi highlighted the effectiveness of recent regulatory and operational reforms. 

“These positive indicators showcase the robustness of the Kuwaiti capital market’s regulatory framework and our continued efforts to enhance infrastructure, diversify products and elevate the investor experience,” he said. 

He noted the strategic role of market segmentation, stating: “The ‘Premier’ Market has maintained stable trading values, while the ‘Main’ Market has shown remarkable activity.” 

In pursuit of a stronger international presence, Boursa Kuwait has engaged in roadshows and corporate days in partnership with global financial institutions. 

These included events in Asia and London, showcasing the exchange’s progress and investment potential. 

Al-Osaimi said: “Through active engagement with world-renowned investment banks, sovereign wealth funds, pension funds and asset management firms, the exchange has cultivated a robust investor base.” He added that institutional investors account for 65.08 percent of participants. 

The CEO reiterated the exchange’s commitment to expanding its product range, enhancing market efficiency, and strengthening investor confidence through transparency and governance. 

Since its privatization in 2019 and self-listing in 2020, Boursa Kuwait has introduced multiple market development phases aimed at boosting its global standing and supporting Kuwait’s broader economic vision.


Oil Updates — crude steadies as market weighs up supply risks

Updated 30 July 2025
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Oil Updates — crude steadies as market weighs up supply risks

  • Trump cuts deadline, vows sanctions if Russia makes no progress
  • Supply risks rise over US warning to China over Russian oil
  • China unlikely to comply with US sanctions, analysts say

LONDON: Oil prices steadied on Wednesday as investors awaited developments on US President Donald Trump’s tighter deadline for Russia to end the war in Ukraine and his tariff threats to countries that trade its oil.

The most active Brent crude futures were down 5 cents or about 0.1 percent, at $71.63 a barrel by 2:26 p.m. Saudi time while US West Texas Intermediate crude slipped 5 cents to $69.61.

The Brent crude September contract that expires on Wednesday was steady at $72.50.

Both contracts had fallen nearly 1 percent earlier in the day.

“Events in the last few days have moved the needle a touch more, but we still appear to be somewhat rangebound and testing the next resistance level,” said Rystad Energy analyst Janiv Shah.

Trump had said on Tuesday that he would start imposing measures on Russia, such as secondary tariffs of 100 percent on trading partners, if it did not make progress on ending the war within 10 to 12 days, moving up from an earlier 50-day deadline.

The US also warned China, the largest buyer of Russian oil, that it could face huge tariffs if it kept buying, Treasury Secretary Scott Bessent told a news conference in Stockholm.

JP Morgan analysts wrote that while China was unlikely to comply with US sanctions, India has signalled it would do so, which could affect 2.3 million barrels per day of Russian oil exports.

“Oil prices reacted strongly yesterday, so there is some profit booking,” said UBS commodity analyst Giovanni Staunovo, adding that data from the American Petroleum Institute from Tuesday was also bearish for crude.

“Market participants are also taking into account that low prices and secondary sanctions/tariffs on Russia won’t work at the same time.”

US crude and distillate stocks rose last week while gasoline inventories fell, market sources said, citing API data.

“Depending on the outcome of the US-Russia discussions, tariff implementation and the OPEC+ meeting and announcement on unwinding (of output cuts), the market could see some movement,” Rystad’s Shah added.