Brewing trade war to weigh on global growth, OECD says

The Organisation for Economic Cooperation and Development forecasts slashed its global economic growth forecast on the back of persisting inflationary pressures and the potential upheaval in trade policies brought on by US President Donald Trump’s trade war, according to the Organisation for Economic Cooperation and Development (OECD)’s latest economic forecast (pdf). The Paris-based organization revised down its prediction for global growth in 2025 by 0.2 percentage points to 3.1% in 2025 — down from 3.2% in 2024 — before slowing further to 3.0% in 2026.

There’s a number of factors at play: Weakening business and consumer sentiments in some countries, coupled with rising uncertainty over economic policy indicators, have collectively contributed to the lowered growth prospects for the year. Meanwhile, “higher trade barriers in several G20 economies and increased geopolitical and policy uncertainty” are also weighing on investment and household spending.

The effects of slowed growth could appear soon: OECD sees global growth weakening in 1Q 2025, with consumer confidence having dipped early during the year, remaining “below long-run average levels despite strong growth in real incomes in many economies,” the report reads.

The big picture: GDP growth in the US is seen coming in at 2.2% in 2025 — down from a previous forecast of 2.4% growth this year — before slowing further to 1.6% in 2026. Growth in the euro area is projected to be 1.0% in 2025, down from a previous forecast of 1.3% growth, before rising to 1.2% in 2026. Meanwhile, China’s economy is expected to grow 4.8% this year, up 0.1 percentage points from the previous forecast, before slowing to 4.4% in 2026.

Closer to home, the OECD expects the Kingdom’s GDP to grow by 3.8% this year, up 0.2 percentage points from its previous prediction in December. Economic growth is expected to slow slightly in 2026 to 3.6%.

Inflation is also seen growing at a higher rate than previously expected, with annual headline inflation in G20 economies projected at 3.8% in 2025 and 3.2% in 2026.

And higher inflation means…: Persistent inflation could “prompt more restrictive monetary policy and could give rise to disruptive repricing in financial markets.”

MARKETS THIS MORNING-

Asian markets are on the rise, tracking gains on Wall Street yesterday after US retail sales data helped ease investor concerns over a potential recession. Japan’s Nikkei and Topix are up 1.6%, while South Korea’s Kospi is up 0.6% and China’s CSI 300 gained 0.25%. Hong Kong’s Hang Seng is also up 1.9%.

Meanwhile, Wall Street futures point to another good day for US indices, with the Dow Jones up marginally and Nasdaq and S&P 500 seeing no change from yesterday.

THE CLOSING BELL-

The DFM rose 0.6% yesterday on turnover of AED 413.2 mn. The index is up 0.2% YTD.

In the green: Depa (+10.8%), Emirates Investment Bank (+5.3%) and Takaful Emarat (+3.1%).

In the red: Ithmaar Holding (-3.7%), Ekttitab Holding Company (-2.4%) and ENBD Reit (-1.9%).

Over on the ADX, the index rose 0.3% on turnover of AED 1.1 bn. Nasdaq Dubai was up 0.1%, and up 2.6% YTD.

CORPORATE ACTIONS-

Methaq Takaful to raise capital to AED 537.6 mn via rights issue: Methaq Takaful Ins. is launching a capital increase that will raise its issued share capital to AED 537.6 mn, up from AED 150 mn, according to an ADX disclosure (pdf). The company will issue 387.6 mn new shares at AED 0.129 per share, reflecting a reduction from the nominal value of AED 1.00.

REFRESHER- The rights issue was approved by shareholders in November. It aims to rebalance Methaq Takaful’s financial structure and stability while improving liquidity for long-term growth.

The subscription period will run from 24 to 28 March 2025, with allocations and refunds scheduled for 8 April 2025. Existing shareholders from 14 March 2025 will have priority and can also apply for additional shares, which will be allocated if unsubscribed shares remain available.

ADVISORS- Abu Dhabi Commercial Bank has been appointed as the sole receiving bank, lead manager, and bookrunner.

Air Arabia’s board approved a dividend equivalent to 25% of capital (25 fils per share), according to a statement (pdf).

Du approved a AED 0.34 per share dividend for 2H 2024, bringing total dividends to AED 0.54 per share for the year, representing 54% of the nominal share value, according to a statement (pdf).

Adnoc Drilling’s general assembly has approved distributing USD 394 mn in dividends for 2H 2024, according to a disclosure (pdf) to the ADX. This brings the total dividend distribution for 2024 to USD 788 mn.

Spinney’s has ratified its board of directors’ recommendation to distribute AED 100.8 mn in dividends for 2H 2024, representing 280% of the company’s paid-up share capital, it said in a disclosure (pdf) to the DFM. It distributed AED 102.6 mn in dividends for 1H 2024.

IHC completes first buyback tranche and starts second: International Holding Company (IHC) completed the first tranche of its AED 5 bn buyback program, worth AED 1.8 bn, and is starting the second AED 1.5 bn buyback tranche today, it said in a disclosure (pdf) to the ADX. The repurchasing program will take a year and see IHC cancel the shares after repurchasing them as it looks to “enhance shareholder value through increased earnings per share.”

Dubai Financial Market’s board of directors will consider and approve distributing 3.2% of the firm’s share capital in dividends for 2024, according to a disclosure (pdf).