Saudi stocks drop by 1.4 percent

0
145

Weak oil prices and global equity prices hit Gulf stock markets on Tuesday, with Saudi Arabia and Qatar dropping the most as they reopened after a long Eid Al-Adha break.
The Saudi Tadawul All-Share Index closed 1.4 percent lower. Brent crude had dropped about 3 percent to below $48 a barrel since the Saudi bourse last traded on Sept. 21; this weighed on Saudi petrochemical shares, with Saudi Basic Industries down 0.6 percent and Saudi Industrial Investment Group losing 4.3 percent.
Miner Maaden slipped 0.7 percent amid a global sell-off in commodity-related shares because of concern about flagging economic growth in Asia.
Makkah Construction and Development, which focuses on projects in Makkah, dropped 3.6 percent after last week’s Haj disaster near the city, raised the possibility of new restrictions and development costs associated with the pilgrimage.
Jabal Omar, another developer focused on Makkah, fell 1.5 percent.
Some banks remained weak after the government suspended construction giant Saudi Binladin Group from new contracts in mid-September following the collapse of a crane in Makkah’s Grand Mosque which killed 107 people. The banking sector has major exposure to the Binladin Group; Banque Saudi Fransi, which has lent to the group, fell 3.3 percent on Tuesday.
Some stocks seen as defensive plays or undervalued outperformed, however, with telecommunications firms Zain KSA and Mobily closing flat.
Sebastien Henin, head of asset management at Abu Dhabi’s The National Investor, said the Saudi market was under pressure from weak petrochemical shares, which were sensitive to oil prices, and unattractive valuations, with its forward price-earnings ratio at about 14 times compared to single digits for some emerging markets.
“Until global oil prices stabilize, and there is better visibility in the government’s spending priorities with oil so low, it will be hard for the market to rebound,” he said.
Qatar’s index sank 1.4 percent with Industries Qatar, a major petrochemical producer, losing 2.5 percent.
Dubai fell 0.8 percent in a broad-based sell-off, with blue chip Emaar Properties dropping 1.3 percent. Abu Dhabi slipped 0.9 percent as the most heavily traded stock, Dana Gas, sank 3.6 percent.
Egypt’s market fell 1.1 percent as non-Arab foreign investors, whose buying had boosted shares on Monday, turned net sellers again, exchange data showed.

LEAVE A REPLY

Please enter your comment!
Please enter your name here