Saudi Arabia considers raising foreign ownership limit on listed companies

Saudi Arabia is reportedly considering raising the foreign ownership limit of listed stocks to more than the current 49%, according to statements from a board member of the Capital Market Authority. An increase in the share of allowable foreign ownership would increase the attractiveness of listed equities in Saudi Arabia to more passive investors and increase its share in global benchmark indices.

The OECD upgraded its outlook for global growth to 3.2% in 2025, up 0.3ppt from its previous forecasts. The outlook across nearly all major G20 economies was revised higher with US growth now expected at 1.8% and Eurozone activity at 1.2%. Across emerging markets, there were also upgrades for China and India’s economy but the strongest upward was for Saudi Arabia’s economy where the OECD now expects growth of 3.7%, up 1.9ppt from its prior estimate. The OECD said that the full impact of US tariffs introduced earlier this year still hadn’t been felt while noting that labour markets were softening across multiple economies.

India’s PMI dipped in September though the composite level at 61.9 still remains very strong. The manufacturing PMI dropped to 58.5 from 59.3 a month earlier while the services sector remains robust at 61.6, down from a very strong 62.9 a month earlier. A supportive inflation environment in India has been helping to support growth even as there were signs of softer labour conditions from the latest PMI data.

In the US, the PMI data for September cooled with slower activity in both the manufacturing and services components. The composite PMI fell to 53.6, below market expectations and down from 54.6 a month earlier. Firms reported facing higher input costs from tariffs but a limited ability to pass them on to consumers.

PMI data for the Eurozone improved in September with the composite PMI rising to 51.2, up from 51 a month earlier. The services sector was the primary contributor to activity with a print of 51.4 as manufacturing deteriorated to 49.5. Much of the gains came from Germany where the services sector improved markedly to 52.5 from 49.3 a month earlier while manufacturing weakened. PMI data from France showed a broader deterioration in September.

In the UK, PMI levels disappointed market expectations and slowed down in September from levels recorded a month earlier. The manufacturing PMI fell to 46.2, down from 47, while the services PMI managed to remain in expansion territory at 51.9 though that was notably lower than the 54.2 recorded in August.

The UAE sold AED 55m in a 2028 sukuk with a coupon rate of 4.48% and AED 550m in a 2030 sukuk with a coupon of 4.06%. Both were over-subscribed by more than 4x.

Abu Dhabi firms Presight and Shorooq agreed to establish a USD 100m AI fund to invest across the industry value chain and into smart cities, energy, fintechs and related industries.

Today’s Economic Data and Events

11:00 TU capacity utilization Sept

12:00 GE IFO business climate Sept

18:00 US new home sales Aug

Fixed Income

Fed chair Jerome Powell reiterated his comment that the Fed was in a “challenging situation” as the risks to “inflation are tilted to the upside and risks to employment to the downside” in comments overnight. He also said there was no “risk-free path” for rates going forward. Elsewhere governor Michelle Bowman said that the FOMC needed to “act decisively and proactively” to push back against weakness in the labour market.

Treasury yields were moderately lower overnight with the 2yr at 3.586% and the 10yr down 4bps at 4.1061%.

Qatar National Bank priced a EUR 750m green bond at MS+75.

FX

It was a mixed session for the US dollar overnight with the broad DXY index moderately lower. EURUSD managed gains of 0.1% to 1.1815 while moves in JPY and GBP were similarly muted. But there were losses in commodity currencies against the dollar with USDCAD higher by 0.1% at 1.3835 and a bigger loss for NZDUSD.

In emerging markets both the Turkish lira and Indian rupee tested higher levels while the Egyptian pound was slightly stronger.

Equities

US equity markets snapped a winning streak with losses across all major benchmarks. The Dow Jones dropped 0.2% while the S&P 500 gave up 0.6% and the NASDAQ fell nearly 1%. European markets were a little better with a gain of 0.6% in the Eurostoxx index.

In the UAE the DFM fell by 1.1% overnight while the ADX was lower by 0.5%. The Tadawul by contrast managed a gain of 0.6%.

Commodities

Oil futures snapped a string of losses overnight as markets respond to escalating geopolitical tensions, particularly around Russian aircraft incursions into NATO countries. Brent futures added 1.6% to USD 67.63/b while WTI added 1.2% to USD 63.41/b.

The API reported a draw in US crude stockpiles of almost 4m bbl last week along with a drop in gasoline inventories.

Gold prices again hit a new record high level of USD 3,764/troy oz, up 0.5% overnight. Markets continue to respond to rate cut expectations and a fraught geopolitical environment.