Emerging-market rout extends to Gulf stocks on Trump policy risk

Dubai: The biggest emerging-market stock selloff in more than a year extended to the Gulf on concern US President-Elect Donald Trump will change oil agreements and his nation’s relationships with Saudi Arabia and Iran.
The DFM General Index in Dubai, which counts Iran as a trading partner, dropped for a third day, losing 1.5 per cent as of 12:58pm local time. Abu Dhabi’s ADX General Index fell one per cent. Qatar’s QE Index retreated 0.7 per cent.
Trump this year promised independence from Opec and vowed to dismantle a nuclear deal with Iran that unlocked the nation’s crude exports. He also said he would approve a pipeline from Canada to the US, which would curb demand for oil from the six-nation Gulf Cooperation Council (GCC), most of whose governments rely on energy revenue to fund spending.
"No one knows what Trump’s policies toward the Middle East will be, and that kind of uncertainty keeps investors away,” said Talal Touqan, the head of research at Abu Dhabi-based Al Ramz Capital, a brokerage and investment bank. "Will he increase production from Canada and break oil agreements? What will his policies be toward Iran and Saudi Arabia?”
Stocks across emerging markets fell for a third day through Friday on concern that Trump’s plan to boost spending will raise inflation, leading to more frequent Federal Reserve interest-rate increases. The rout extended to bonds and currencies, including all three of Saudi Arabia’s US dollar bonds, which fell every day since he won the election.
Meanwhile, Saudi Arabian stocks have continued to rally after the government sold $17.5 billion of bonds last month, an emerging-market record. The Tadawul All Share Index, which entered a bull market last week, gained for a seventh straight day on Sunday, adding 1.5 per cent. The gauge has advanced 16 of the past 18 days.
Kuwait’s SE Price Index slipped 0.2 per cent and the Bahrain Bourse All Share Index fell 0.1 per cent.