DUBAI: Saudi Arabia’s stock index touched its lowest level in more than three months on Monday, with regional markets sinking as investors shied away from banks with links to Turkey’s deepening economic turmoil.
Attracted by its large population and surging economy, several Gulf banks have expanded into Turkey in recent years, most recently Dubai’s largest bank Emirates NBD, which in May agreed to buy Turkey’s Denizbank in a $3.2 billion deal.
But investor confidence in the economic outlook has been shattered by the lira tumbling on worries over President Tayyip Erdogan’s increasing control over the economy and deteriorating relations with the United States.
Emirates NBD slumped by 4.6 percent. Emaar Properties , which has projects in Turkey, was down 2.3 percent.
The main Dubai index slipped by 1.5 percent, while he main Saudi index lost 2.4 percent.
National Commercial Bank (NCB), Saudi Arabia’s largest bank by assets, fell by 3.7 percent. NCB’s exposure to Turkey is estimated by Arqaam Capital as 8 percent of its assets and 12 percent of its loans.
Other Saudi blue-chip stocks were also down. Saudi Basic Industries Corp. (SABIC) fell by 2.4 percent, while Al Rajhi Bank slipped by 2.6 percent.
The Middle East and North Africa’s largest bank, Qatar National Bank, retreated by 2.6 percent. Around 15 percent of the bank’s assets and 14 percent of its loans relate to Turkey, according to Arqaam Capital.
Qatar’s Commercial Bank, which owns Turkey’s Alternatifbank, edged down 0.6 percent. The wider index shed 0.8 percent.
In Kuwait, Kuwait Finance House and Burgan Bank , both of which have loans and other assets in Turkey, declined by 1.3 percent and 1.4 percent, respectively.