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UAE Shares Close Higher as Non-oil Private Sector Growth Recovers

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Emirati shares closed higher as investors weighed the latest figures from the country's non-oil private sector against geopolitical tensions in the Middle East.

At the close of Wednesday trading, the FTSE ADX General Index was little changed at 0.096% in the green, while the DFM General Index was up 0.364%.

The S&P Global UAE PMI, an indicator of the country's non-oil private sector activity, increased to 52.7 in July from a five-year low of 50.8 in June, marking the highest reading since March. New orders, exports, and workforce numbers rose despite supply chain disruptions and elevated cost pressures.

"Although the July PMI reading of 52.7 remains a step lower than the levels observed prior to the Middle East conflict, it provided some assurance that businesses were coping better after a heavily disrupted Q2," S&P Global Market Intelligence principal economist David Owen said. "Still, the volatile situation in the Strait of Hormuz continues to make the future uncertain and kept price pressures elevated in July, which firms struggled to fully pass on to customers amid a competitive business environment. Firms also saw a reduction in inventories despite a sharp rise in purchasing, suggesting they are still operating with tighter stock volumes and longer supply schedules."

In geopolitical news, Axios reported, citing two regional sources, that the US, Iran, and Oman are nearing an interim agreement to resume shipping flows through the Strait of Hormuz. Axios also stated that the deal could be announced as soon as Wednesday.

Moving to regional corporate news, Abu Dhabi National Oil Co. for Distribution (ADX:ADNOCDIST), d/b/a Adnoc Distribution, recorded a 58.5% year-over-year growth in its attributable net profit for the first half, backed by higher fuel volumes and growth in non-fuel retail and positive inventory movements. Its shares closed the session 0.73% lower.

Elsewhere, Mashreq Bank (DFM:MASQ) shares shed 0.81% at closing. FAB Securities reiterated its hold rating and a price target of 270 Emirati dirhams after the lender logged a higher-than-expected net profit in the second quarter. The growth was primarily driven by higher funded and non-funded income, and impairment reversals.

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Dow Jones^EEM^EXI^FAS^FAZ^GLD^IBB^IGM^IGV^IPK^IVV^IWMNasdaq Composite^IYE^IYH^IYJ^IYK^IYW^PMR^QQQ^RTH^SOXXS&P 500^SPY^UNG^USO^VDC^VHT^VIS^XLE^XLF^XLI^XLK^XLP^XLV^XRT^XSD$BETH$BITO$EETH