Traders are feeling grumpy in Asia this morning. But first: A look at Tadawul, which is closing the books on a year that sees international institutional investors finally giving a second look to one of the world’s most compelling equities markets.

Saudi’s Tadawul is piquing the interest of fund managers from across the globe, with its benchmark index rallying 11% this year on the back of its economic diversification program, Bloomberg reports.

Diversification has helped change investor perceptions. Banks and petrochemical players are now joined on the bourse by listings from healthcare, retail, and power companies as well as (most recently) the broadcaster MBC. A string of IPOs since January 2022 has seen IPOs worth USD 11.5 bn go to market.

There’s also simply a lack of alternative EMs in which to invest: China’s economic slowdown and Russia’s exclusion from the MSCI index have played to the advantage of KSA, and Egypt belongs to domestic and retail investors right now thanks to a currency overhang.

One stumbling block to Tadawul’s growth: The market is still geared for local investors, with foreign ownership limits set at just under 50% for most stocks. Passive inflows alone would deliver USD 7.3 bn in additional inflows if those were scrapped, Arqaam Capital’s Elia Alchaar told Bloomberg.

SPEAKING OF IPOs- Low-cost airline Flynas has tapped Goldman Sachs, Morgan Stanley, and Saudi Fransi Capital for a potential IPO in Riyadh next year. (Bloomberg)

AND- PureHealth shares made their debut on the ADX yesterday, closing up 84% at AED 6.00 after opening the day at AED 3.26. Selling shareholders raised some AED 1 bn in the heavily oversubscribed sale. It was the second-largest IPO in the UAE this year after ADNOC Gas.

ADVISORS- FAB was lead manager and lead receiving bank of the transaction.

Asian shares are selling off this morning, with indexes across the region following New York into the red. A late selloff on Wall Street set the tone for this morning’s selling: The three big Wall Street benchmarks all posted yesterday their biggest daily losses since October. Shares in Europe look set to dip at the opening bell later today, putting them on track to trim the gains they’ve made in the past 10 days, futures suggest.

But: Futures suggest the Santa rally could resume later today in New York and Toronto.

EGX30

24,838

-1.0% (YTD: +70.1%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

11,703

+0.1% (YTD: +11.7%)

ADX

9,482

-0.1% (YTD: -7.11%)

DFM

4,014

+0.4% (YTD: +20.3%)

S&P 500

4,698

-1.5% (YTD: +22.4%)

FTSE 100

7,716

+1.0% (YTD: +3.5%)

Euro Stoxx 50

4,534

0.0% (YTD: +19.5%)

Brent crude

USD 79.70

+0.6%

Natural gas (Nymex)

USD 2.45

-1.8%

Gold

USD 2,048

-0.2%

BTC

USD 43,402

+2.3% (YTD: +163.8%)

THE CLOSING BELL-

The EGX30 fell 1.0% at yesterday’s close on turnover of EGP 2.9 bn (10.7% below the 90-day average). Regional investors were net buyers. The index is up 70.1% YTD.

In the green: Alexandria Containers and Cargo Handling (+3.7%), E-finance (+1.6%) and Telecom Egypt (+1.4%).

In the red: Edita (-3.2%), Credit Agricole (-2.8%) and B Investments Holding (-2.6%).

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