A. SREENIVASA REDDY (ABU DHABI)

UAE stock markets advanced on Thursday after the S&P Global PMI report showed robust expansion in the non-oil private sector, with the PMI rising to 55.3 in August from 52.7 in July.

The ADX General Index (FADGI) rose 0.212% to close at 9,927.39. The session recorded 26,683 trades involving 444 million shares worth Dh1.34 billion. The total market capitalisation of ADX-listed companies stood at Dh2.597 trillion.

Almost all blue-chip stocks were in positive territory after the PMI report brought cheer to the markets. Banking stocks were positive, except for First Abu Dhabi Bank (FAB). Abu Dhabi Islamic Bank rose 1.06%, while Abu Dhabi Commercial Bank advanced 0.13%. FAB declined 0.62% as the global bond sell-off appeared to have had an adverse impact.

ADNOC-linked stocks also followed the positive trend. ADNOC Drilling rose 1.75%, while ADNOC Gas added 0.63%. ADNOC Distribution rose 0.25%, while ADNOC Logistics and Services remained unchanged at Dh6.85. Fertiglobe jumped 5.77% to Dh2.75, while Borouge remained unchanged at Dh2.34.

Among holding companies, Alpha Dhabi rose 0.14%, while 2PointZero advanced 0.49% to Dh2.04.
Real estate major Aldar, which has faced market headwinds recently, rose by an impressive 0.93%.

Space42 continued its bullish run with a gain of 6.67%. Eshraq Investments also extended its rally, rising 5.5%. EPC contractor Orascom Construction added 7.1%.

In Dubai, the Dubai Financial Market General Index (DFMGI) rose 0.491% to close at 5,843. The session recorded 14,605 trades, with 260 million shares changing hands for a total value of Dh535 million.

Market breadth was positive, with 31 gainers and nine decliners, while 10 stocks remained unchanged.

Real estate major Emaar Properties rose 1.13%, while its subsidiary Emaar Development advanced 0.79%, helping lead the market rally.

Banking stocks also showed a positive trend, with Emirates NBD gaining 0.46% and Dubai Islamic Bank adding 0.73%.

Road-toll operator Salik rose 0.38%, while talabat remained unchanged at Dh1.20. Parking operator Parkin advanced 1.03%.
Telecom operator du gained 0.73%, while utility provider DEWA added 1.10%.

Commenting on the relationship between the PMI reading and the markets, Sayed A., Chief Business Officer at Graystone Capital, said: “August’s PMI reading of 55.3 represents a genuine improvement, but it should be viewed as a recovery rather than an acceleration. The index is rebounding from the war-affected low recorded in June.”

Sayed said the notable detail was that export orders expanded for a second consecutive month after declining during the second quarter, suggesting that companies had adapted to the regional disruption. “That is a more durable signal than the headline figure,” he said.

Commenting on stock-specific developments, Sayed said: “Fertiglobe’s 5.77% gain was the one large-cap move with a clear fundamental driver. The same energy shock that is unsettling global bond markets is supporting urea and ammonia prices.”

The performance of banking stocks was the most informative part of the session, Sayed said. “On a day of unambiguously positive domestic data, the banks with the largest international balance sheets recorded only limited gains or declined. That is the global bond market speaking, rather than a verdict on the UAE economy,” he said.

Looking ahead, Sayed said the US Federal Reserve’s next policy decision could prove more important for the markets than the next PMI reading.

“Futures are pricing in a meaningful probability of a quarter-point increase this month, which would be the first rise since 2023. Because the dirham is pegged to the US dollar, that decision would feed directly into local borrowing costs,” he said.

“For companies financing inventories, receivables and expansion, the cost of capital in the fourth quarter will matter considerably more than any single survey reading,” Sayed added.