DUBAI: Most Gulf Arab stock markets slumped yesterday as an oil price retreat and declines in global shares trampled on already weak investor sentiment in the oil-exporting region.
Qatari shares plunged more than 3 percent to their lowest close in more than five years, Abu Dhabi’s benchmark snapped a nine-day rally and Dubai’s index extended declines into a sixth trading day.
“A lot of investors are worried today that the strong losses in the US markets will have an impact on sentiment here,” said Mohammed Yasin, managing director at Shuaa Securities.
Overnight, oil prices—that have collapsed more than $ 100 a barrel since peaking last July—dropped more than 10 percent.
While the price of crude rose above $ 40 a barrel yesterday, the decline heightened concerns about the profitability of regional companies and the health of the Gulf’s oil export revenue-dependent economies.
World stocks took yet more losses yesterday with European shares hitting a record low, a day after most equity markets suffered a thorough battering at the hands of investors fearful for the global financial system.
“There has been no real decoupling yet between Gulf markets and global markets,” said Haissam Arabi, chief executive and fund manager of Gulfmena Alternative Investments, a regional specialist hedge fund company. Saudi Arabia’s bourse, the Arab world’s largest, fell for a second day, while Kuwaiti and Omani benchmarks retreated more than 2 percent each.
HIGHLIGHTS
ABU DHABI: The main index, which had added more than 11 percent in the prior nine trading days, fell 2.08 percent to 2,403 points, its biggest one-day fall since January 21. Emirates Telecommunications Corp lost 3.6 percent, having risen about 26 percent this year. “In Dubai and Abu Dhabi, there were a good few days of gains, so this is a good time to take profits. Investors are very short-sighted,” Arabi said. Abu Dhabi National Energy Co (Taqa) bucked the downtrend, gaining 5.23 percent as the firm continued with a buyback scheme.
DUBAI: The measure, down more than 7 percent in the last five trading days, retreated 2.7 percent to 1,490 points. It had rallied for a few days in February after the government announced it was selling $ 10bn in bonds to the UAE central bank. Emaar Properties fell 5.45 percent and Union Properties tumbled 9.09 percent after saying it was open to the idea of a merger and may cancel a Formula one theme park.
SAUDI ARABIA: The index slipped 0.31 percent to 4,318 points, closing lower for a second trading day. Saudi Basic Industries Corp (SABIC) gained 1.94 percent while Al-Rajhi fell 2.17 percent. “(Global declines) are affecting GCC markets, especially Saudi Arabia, where it is adding negative sentiment on the trading,” said Samer Al-Jaouni, general manager at Middle East Financial Brokerage Co.
KUWAIT: The benchmark shed 2.04 percent to 6,400 points. Investors in the Gulf state are nervous about whether parliament would approve a 1.5-billion dinar state rescue package for companies. National Bank of Kuwait, down more than 14 percent this year, retreated 4.35 percent. “The delay in the bailout once again is adding pressure … it’s very negative for investors,” Jaouni said.
OMAN: The index ended lower for the first time in five trading days, dropping 2.16 percent to 4,771 points. Oman Telecommunications Co (Omantel) eased 3.2 percent and Bank Muscat fell 4.8 percent.
BAHRAIN: The index edged 0.04 percent higher to 1,575 points. Ahli United Bank gained 2.7 percent.
