First Stock-Market Reaction to Biden Signals Hope for Healing

Stock markets in the Middle East, the first to trade after Joe Biden’s victory in the U.S. election, are signalling bets the new president will reduce international conflict and push for peace in the region.

That optimism outweighed concern that his clean-energy drive could imperil the fortunes of countries whose economies are founded on oil and gas. Stocks in Dubai posted their biggest three-day rally since August. Saudi Arabia extended the longest streak of gains since Oct. 13. The Kuwait gauge closed above its 50-day moving average, while Oman stocks had the first back-to-back advance in a month. Israel’s main index rose to a two-month high.

The president of Iraq, Emir of Qatar and Abu Dhabi Crown Prince Mohammed bin Zayed — de facto leader of the United Arab Emirates — all sent their congratulations to Biden. Brent crude fell 3.6% to $39.45 per barrel on Friday, when the result of the U.S. presidential race was yet to be determined.

Regarding a shift in Iran policy by the U.S., Samhouri said: “It is going to take some time. I’m sure they will not go back to the old agreement. Definitely, the new administration will seek some amendments to it.”

Trump withdrew the U.S. from the 2015 agreement and imposed sweeping sanctions to try to force Tehran to accept a tougher deal that also limits its missile program and ambitions in the Middle East. Trump also has a close relationship with Saudi Arabia.

In the Gulf, Abu Dhabi’s market broke away from the positive sentiment and posted losses on Sunday, with the main index falling for the first time in five days.

“Everybody believes Democrats will come and push for clean energy, what should be bad for oil,” said Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital Ltd. “This is partly true. Oil is not going to be weaker than what we saw. It could stabilize in the range between $40-45/barrel as an average for the year.”

Biden’s earlier indications that his administration would rejoin the Iran nuclear accord that Donald Trump abandoned have kindled hopes for regional growth and stability. At the same time, prospects for smoother trade across the world have come as a relief for oil exporters after Brent crude’s worst annual losses since 2014.

“We are expecting less stress in terms of a trade war, trade negotiations, whether with North American partners, European partners or China of course,” Talal Samhouri, the head of asset management at Doha-based Amwal LLC, said on Bloomberg Television. “This definitely will help regional markets because they are increasingly dependent on selling oil to southeast Asia, and that region will be the greatest beneficiary of end of trade wars.”

MIDDLE EASTERN MARKETS:

-In Iran, the main equities index finished 1.7% lower as the rial strengthened, denting appetite for shares in exporters
-Dubai’s real estate bellwether Emaar Properties ended 3.5% higher after the UAE government announced a plan to amend personal status law and criminal code.
-The changes make the “UAE a much more attractive place to live, and a destination of choice. This follows recent initiative for foreign professionals to work from home from the UAE,” said Jaap Meijer, head of equity research at Arqaam Capital in Dubai
-“It is going to be a game-changer, and stocks to play are Emaar Properties and Emaar Development, which are trading very cheap at the moment. This could unlock some value”
-Saudi Arabia’s Tadawul All Share Index climbed 0.9%, trimming loss this year to 2.7%

-SIIG jumps as much as 4.3% to the highest level since Oct. 22
-Kuwait’s Premier Market index gains 0.5%, the most in the region

-NOTE: The country will be upgraded to MSCI’s emerging markets group from the frontier category at the end of this month

EARNINGS RESULTS:

-Commercial Bank Of Kuwait 3Q Net Income 15.9M Dinars
-Saudi Public Transport 3Q Loss 121.8M Riyals
-Saudi Chemical 3Q Profit 18.9M Riyals
-Northern Region Cement (NORTHCEM AB) 3Q Profit 21.4m Riyals, -18% y/y
-Mideast Health care (MEH AB) 3Q Profit 34.9m Riyals, +5.1% y/y
-Saudi Fransi (BSFR AB) 3Q Profit 333m Riyals, -62% y/y
-Mouwasat (MOUWASAT AB) 3Q Profit 161.1m Riyals, +73% y/y
-Deyaar (DEYAAR UH) 9m Net Income 13.1m Dirhams