To read the full report, please download the PDF above.
Middle East Daily
SOOJIN KIM
Research Analyst
DIFC Branch – Dubai
T: +44(4)387 5031
E: soojin.kim@ae.mufg.jp
MUFG Bank, Ltd. and MUFG Securities plc
A member of MUFG, a global financial group
Middle East Daily
COMMODITIES / ENERGY
Oil slides as US tightens grip on Venezuela, deepening supply glut fears. Oil prices extended their decline as the US moved to tighten its grip on Venezuela’s oil industry, adding to pressure from an already oversupplied global market. Brent slid toward USD60/b while WTI traded near USD56/b after President Trump said Venezuela’s interim authorities would hand over as much as 50mb of crude to the US for sale, with proceeds shared between the two countries. Reports also suggested US is pushing Venezuela to exclusively partner with the US on oil supplies and cut ties with China, Russia, Iran, and Cuba, marking a major geopolitical realignment following the ouster of Nicolas Maduro. While Venezuela now accounts for only about 1% of global supply, uncertainty over its exports has added to bearish sentiment alongside fears of a deepening glut after last year’s worst oil price slump since 2020. Broader pressure also came from mixed US inventory data and concerns that any Ukraine peace deal could eventually loosen curbs on Russian oil, further swelling global supply.
Gold steadies as focus shifts from geopolitics to US data. Gold steadied near USD4,490/oz after three days of gains, as investors looked past heightened geopolitical tensions and turned their focus to a packed week of US economic data. Gold has risen more than 4% since the capture of Venezuelan leader Nicolas Maduro, amid broader uncertainty after President Trump said the US would not rule out military force to acquire Greenland and as China imposed export controls on goods with potential military use to Japan. Attention is now shifting to monetary policy, after weak US manufacturing data and comments from Fed Governor Stephen Miran reinforced expectations of further easing by the Fed. Gold is coming off its strongest annual performance since 1979, supported by central bank buying and ETF inflows.
MIDDLE EAST - CREDIT TRADING
End of day comment – 06 January 2026. Activity decreased in my GCC universe. It looks like the market focus is now squarely on primary markets given the number of announcements we have already seen which takes away a bit the focus on secondaries especially on names/ areas where no new issuance is expected in the short term. Flows were a bit more balanced overall but ETFs remain sellers. Long end bonds still see sellers and short to medium term bonds have yield buyers. As result yield and spread curve continue to steepen. Take ADGB 28s-30s closing unch in price and -2bp whereas 50s-70s close -0.375pt/+2bp. QATAR was less active than ADGB but with the same pattern. Corners of higher beta bonds outperformed. SHARSK 36s continued its recovery closing +0.25pt/-5bp. Also MOROC had some buyers and the curve broadly held in cash price terms meaning spreads closed 2/3bp tighter there. The only deal pricing today in my universe was EBIUH, the 3y will price at T+65bp (300mm) and the 5y at T+80bp (700mm) which leaves 5/10bp on the table against last traded levels in outstanding bonds.
MIDDLE EAST - MACRO / MARKETS
Saudi Arabia fully opens stock market to foreign investors. Saudi Arabia has removed all remaining restriction on foreign participation in its equity market, allowing non-resident investors to trade directly in the main market from Feb 1 as part of a broader push to revive the region’s largest stock exchange. The Saudi Capital Market Authority said it eliminated the Qualified Foreign Investor (QFI) framework, scrapping requirements such as the USD500 million assets under management threshold and opening the market to all categories of foreign investors. The move follows a tough year for equities, with the Tadawul falling nearly 13% in 2025, and comes as Saudi Arabia seeks to attract more capital amid rising budget deficits driven by high spending and lower oil revenues. Foreign ownership already stood at about USD157bn by end-September, mostly concentrated in the main index, and authorities expect the reform to draw additional inflows, support a growth IPO pipeline of up to 100 potential listings, and give a much-needed boost to a market still recovering from last year’s slump. The decision aligns Saudi Arabia more closely with global emerging markets standards and is likely to have regional spillovers by increasing competition for international capital and accelerating market reforms across MENA.
December PMI readings show uneven private sector expansion across MENA. December PMI data pointed to ongoing private sector expansion across key MENA economies, though with softening momentum toward year-end. In the UAE, the non-oil PMI eased to 54.2 in December from 54.8 in November. Within the UAE, Dubai also saw a slight easing from 54.5 to 54.3, reflecting slower growth in new orders while overall activity remained resilient. Egypt recorded a PMI of 50.2, down from 51.1, indicating marginal but sustained expansion in private activity. Meanwhile, Qatar saw a sharper slowdown, with its PMI falling from 51.8 to 50.0, signalling a slowdown in private sector growth. Overall, the December readings suggest that while activity remained resilient, growth momentum softened noticeably heading into 2026.
