DUBAI: Most stock markets in the Gulf ended higher on Tuesday amid strong fundamentals and rising oil prices, while the Dubai index extended losses on plans for a federal corporate tax and geopolitical tensions.
Saudi Arabia’s benchmark index added 0.2%, helped by a 1.5% gain in the kingdom’s largest lender Saudi National Bank .
Stock markets in the Gulf were mostly rising thanks to the strong energy markets and solid local fundamentals. The region is benefiting from a post COVID recovery and decreasing concerns about the spread of the Omicron variant, said Eman AlAyyaf, CEO of EA Trading.
The Qatari benchmark gained 0.6%, with Qatar Gas Transport jumping 3.9%.
In Abu Dhabi, the index reversed early losses to end 0.2% higher, with conglomerate International Holding gaining 0.7%.
Dubai’s main share index finished 1% lower, extending losses from the previous session, weighed down by a 1.7% fall in blue-chip developer Emaar Properties.
The United Arab Emirates (UAE) said on Monday it would introduce a federal corporate tax on business profits for the first time starting from June 1, 2023, although it kept the rate low, at 9%, to maintain its attractiveness for businesses.
Corporate taxes on profit are expected to reduce net earnings for companies outside free zone properties, creating a bearish sentiment in the market, according to Vijay Valecha, chief investment officer of Century Financial.
“Additionally, increasing geopolitical tensions between the UAE and Yemen are weighing heavily on the local bourses.”
On Monday, the UAE intercepted a ballistic missile fired by Yemen’s Iran-aligned Houthi movement, the third such attack on the US-allied Gulf state in the last two weeks.
Outside the Gulf, Egypt’s blue-chip index closed 1% higher, led by a 1.1% increase in top lender Commercial International Bank.
SAUDI ARABIA rose 0.2% to 12,293
ABU DHABI up 0.2% to 8,717
DUBAI dropped 1% to 3,171
QATAR gained 0.6% to 12,573
EGYPT added 1% to 11,603
BAHRAIN was up 0.3% to 1,815
OMAN fell 0.1% to 4,111
KUWAIT rose 0.3% to 8,033.