Saudi Arabia

Saudi Arabias inclusion in the FTSE Emerging Index in March saw 166 new Saudi entities exposed to global investors, raising the Tadawuls international profile.

The index provider is slowly integrating the kingdom into its global index. Saudi Arabia is projected to have an index weight within FTSE Global Equity Index Series (GEIS) of 0.31 percent and 2.86 percent within the FTSE Emerging All Cap Index.

Due to this projected size in the Emerging index, FTSE Russell proposes to implement the inclusion of Saudi Arabia in several tranches to ensure mechanisms are operating as expected, thereby minimizing price pressure on new constituents and to spread outflows from those markets being sold down, the index provider said.

In anticipation of the induction in the index, the Tadawul has already surged just over 10 percent in the first ten weeks of the year, to add to its 8.3 percent gains last year.

The inclusion should also help bring in about $20 billion of combined passive inflows during 2019, according to an analyst. Saudi Arabias entry into FTSE Russel Emerging Market Index would push up foreign ownership from around 2 percent, one of the lowest in the region, to around 6 percent, according to Al Mal Capital.

In a bid to fuel the momentum further, the Saudi Capital Market Authority also announced a series of reforms in an effort to nurture small to medium businesses. The regulator announced that the Nomu Parallel Market will allow companies to list without an initial public offering, lowered liquidity and reporting requirements. The change is expected to be implemented in two phases.

United Arab Emirates


The UAEs two main markets continue to diverge. While the Dubai stock market was up 2.8 percent in the first ten weeks of the year, the Abu Dhabi market fell 1.9 percent during the period. Interestingly, Dubai had fallen nearly 25 percent during 2018, at a time when Abu Dhabi rose nearly 12 percent.

The UAE has introduced a number of incentives in the past year to attract businesses, and thats slowly trickling into the economy.

Last year, Abu Dhabi launched a 50 billion United Arab Emirates dirhams ($13.1 billion) economic stimulus package focused on raising business activity and creating jobs.

Under the guidance of HH Sheikh Khalifa bin Zayed, I have approved a 3-year, 50 billion dirham economic stimulus package to support Abu Dhabis economic development and have tasked the Executive Councils Executive Committee to draw up a working plan for allocations within 90 days, tweeted Sheikh Mohamed Bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE's Armed Forces.

The far-reaching initiative aims to create 10,000 jobs for UAE nationals in the public and private sector over the next five years.

Similarly, Dubai also cut a number of fees to lower cost of business last year and stimulate the economy and opened the economy further to attract international investors.

At todays Cabinet meeting, we decided to allow 100 percent foreign ownership of companies in UAE, with a 10-year visa for investors, scientists, doctors, engineers, entrepreneurs and innovators, Sheikh Mohammed bin Rashid Al Maktoum, the UAEs vice president and prime minister and Dubai said in a tweet in May.

In March this year, the Government of Dubai's Department of Finance (DOF) launched a second package of economic growth initiatives aimed at enhancing the emirate's economic incentive package.

The five major incentives include prompt government payments to SMEs within 30 days, reducing the value of primary and performance insurance for SMEs, allocating five percent of government capital projects to SMEs, and allocating projects worth 1 billion dirhams to the public-private partnerships model, in a bid to attract private sector investments.

UAEs corporates earnings and dividend hikes announced in March should also boost overall investor and consumer sentiment.

Kuwait

Among other major Gulf markets, Kuwaits premier market index surged 6.3 percent during the first ten weeks of the year, thanks to an expansionary budget and strong corporate results.

Boursa Kuwait was also recently upgraded to Emerging Market by FTSE Russell, while analysts expect Morgan Stanley Capital International, MSCI and Standard & Poors Dow Jones index providers to follow suit soon.

Kuwait also eased its capital market rules, by allowing foreign investors to own a bigger stake of its domestic banks, according to the Ministry of Commerce and Industry on Saturday, another step in the Gulf states bid to encourage international investors into the country.

Egypt

Egypt, however emerged as the biggest gainer during the period, rising 16 percent on the back of economic stimulus, strong investments from the private sector and international investors, and strong corporate earnings outlook.

Noor Bank 2019