Saudi Arabian stocks dropped on Sunday with banking and petrochemical shares taking the biggest hit after attacks on two key Saudi oil plants a day earlier knocked out more than half of Saudi crude output. The drone attacks, which were claimed by Yemen's Houthi group, are likely to push up the oil price by $5-10 per barrel when it opens on Monday. Crude may shoot up to $100 per barrel if Saudi Arabia fails to return to its full oil supply capacity after Saturday's attacks on Aramco oil plants.
Saudi's index closed 1.1% lower to fall for a fourth straight session, with Al Rajhi Bank down 1.2% and petrochemical maker Saudi Basic Industries (SABIC) lower 2.6%. SABIC and other petrochemicals firms announced significant reductions in feedstock supplies.
Sunday's decline means the market has erased all its gains for the year and traded at 0.9% loss for 2019. Saudi stocks have been forced on the back foot in recent weeks by expensive valuations, weak oil prices and concerns about the economic outlook. The attacks also weighed on other major Gulf markets which all drifted into red territory.
Dubai's index was down 0.6%. Real estate shares were the biggest drag with the emirate's largest listed developer Emaar Properties closing 1% lower. Beaten down real estate firms have long been playing defensive as Dubai property prices have slumped 25-35% since mid-2014 with no respite in sight. The prices are likely to go further down this year and next amid a slowing economy and an oversupply of housing units.
Telecoms company Du, which uses Huawei equipment in its 5G network, lost 1.4%. The United States has raised its concerns with Gulf allies over a possible security risk in using Huawei's technology for their 5G mobile infrastructure. But in Qatar, it was mainly financials pushing down the index, which also fell 0.6%. The Gulf's biggest lender Qatar National Bank shed 1.2% while the region's top insurer Qatar Insurance dropped 2.4%.
Lenders also pulled the Abu Dhabi index down 0.4%. Market heavyweight First Abu Dhabi Bank and Abu Dhabi Commercial Bank slipped 0.7% and 1% respectively. Egypt's blue-chip index was down 0.6% with 22 stocks falling and seven rising. Real estate investment firm Talaat Mostafa Group Holding dropped 2.1%.
Comments
Comments are closed.