Strong buying demand reported
Investors ‘refocus on underlying issues’
Airlines were among the biggest gainers as Gulf stock markets rallied on Tuesday following President Donald Trump’s declaration of a ceasefire between Iran and Israel.
The war, which began on June 13 when Israel attacked Iranian nuclear facilities, led Gulf airlines to suspend some flights and amend routes. International carriers flying to the region also reduced services.
Dubai-listed Air Arabia surged 7.8 percent on Tuesday, rising for a second session since Friday’s 11-week low.
Saudi Arabia’s Flynas, which made its Riyadh bourse debut on June 18, climbed 6.6 percent to SAR79.20, still below its initial public offering price of SAR80.
“Regional markets’ biggest risk has long been a conflict between Iran and Israel,” said Sanat Sachar, a portfolio manager at Azimut Middle East in Dubai.
So, Trump’s statement prompted “strong buying demand among all investor groups – retail, local and foreign institutions”, he said.
“Markets had been easing lower for the previous few days. There wasn’t a lot of selling pressure, but there was little buying demand, so volumes were low,” according to Sachar.
The ceasefire hopes have “drawn a lot of buyers back to the markets – it’s a structural, broad rally across most sectors”.
Later on Tuesday, however, Trump accused both governments of ceasefire violations, complicating the outlook.
Hospitality, tourism-related and real estate stocks rose on Tuesday as investors bet that a halt to the Iran-Israel conflict would benefit those sectors.
Emaar Properties was the standout in Dubai, gaining 5.1 percent to help the emirate’s index rise 3.4 percent to 5,593 points – just 37 points below the 17-year peak it recorded on June 10. Emaar’s malls, hospitality and entertainment divisions generated 26 percent of its annual revenue last year.
Saudi Arabia’s index rose 2.4 percent to a two-week high, despite Saudi Aramco – the Gulf’s largest listed company – declining 1.6 percent to a five-year low in heavy trading.
Oil prices have dropped this week as fears that Iran would close the Straits of Hormuz lessen. About one-fifth of global oil supplies travel through the waterway.
“Should the ceasefire hold, investors will refocus on the underlying issues facing the markets and individual companies,” said Sachar. “In Saudi Arabia, that’s low oil prices, the fiscal breakeven and high government spending needs to fund economic development plans.
“With oil prices in the mid-60s again, the government will need to borrow to meet its spending commitments, which will benefit Saudi banks – loan growth should be strong and interest rates will be supportive.”
Investors seem to agree, with banks among Riyadh’s most active stocks on Tuesday. Al Rajhi Bank rose 2.8 percent, Saudi National Bank climbed 3.2 percent and Alinma Bank gained 5.1 percent.
Abu Dhabi’s benchmark climbed 2.5 percent to take its 2025 gains to 4 percent. Kuwait’s premier index – the Gulf’s top performer this year – rose 2.4 percent.
