Saudi stocks closed down one percent on Saturday as investors shrugged off neighbouring Dubai's debt crisis in the first trading day on the Riyadh market in nearly two weeks. The Gulf's largest equities market sank 2.3 percent when trading opened for the first time after the Eidul-Azha holiday break, but recovered and was off only 1.06 percent at the close.
The main TASI index fell to 6,288.27 from 6355.82 at its last closing on November 25, the day state-owned conglomerate Dubai World said it was asking to suspend payments on 59 billion dollars in debt. That and the Dubai government's subsequent announcement that it would not guarantee the debts of Dubai World, which is heavily exposed to the emirate's deeply depressed property sector, sent shockwaves through the global financial system, causing regional stock markets to plunge.
Despite assurances from the Saudi central bank chief that Saudi banks had minimal Dubai exposure, the banking and finance sector index fell 2.35 percent on the Riyadh exchange, which trades on a Saturday-Wednesday week. SABB Bank, the local affiliate of global giant HSBC, which is believed to have one of the largest exposures of any European bank to Dubai, led the losers' column dropping 4.47 percent.
Saudi banks have not disclosed their exposure to Dubai entities, but Jasser said their exposure to Dubai World debt was less than 0.2 percent of their balances. The government, meanwhile, is flush with reserves which reached 389 billion dollars in October, up 8.8 billion dollars on the previous month because of rising oil prices.
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