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Saudi Stocks Plunge Almost 10 Pct - ASHARQ AL-AWSAT English Archive
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KUWAIT CITY (AFP) — The Saudi stock market, the Arab world’s largest, suffered huge losses on Monday, shedding almost 10 percent as shares in other Gulf states also slumped amid the global financial turmoil.

It was the first day of trading in Saudi Arabia after a week-long holiday for the end of the Muslim fasting month of Ramadan.

The Saudi Tadawul All-Shares Index (TASI) finished down 9.81 percent at 6,726.60 points, its lowest level in more than a year. It was the biggest single-day loss in several years.

TASI had already ended the third quarter the previous Monday, before the holidays, at 7,458.50 points, down 20.2 percent in the third quarter. The market is now 39 percent down on the year.

It was one of the worst days in the history of Saudi shares. All the 124 stocks that traded dropped by close to 10 percent, the maximum allowed under Saudi law.

Saudi stocks were sent into freefall not only by the continuing uncertainty in global financial markets, but also by modest nine-month profits reported by a number of leading banks.

The two factors combined to pull the market down, Saudi economist Ali al-Dakkak said.

“It’s a panic from what’s happening in the global market. Investors here are simply expecting the worst in the US and European markets and are anticipating a severe impact in Saudi Arabia and the region,” Dakkak told AFP.

“The fall was helped by the less-than-expected profits announced by some listed companies, especially banks. This could be an indication for other firms,” said Dakkak, head of Al-Dakkak Economic Studies House.

Al-Rajhi Banking Corp, the largest bank on the Saudi stock market, reported only a five percent rise in profits for the first three quarters, while SAMBA group said its profits dropped 6.3 percent.

All 15 sectors in the Saudi market fell, topped by the media sector.

The petrochemicals sector, which includes the giant market leader SABIC, shed 9.92 percent. SABIC itself lost almost 10 percent.

Markets in other Arab states in the Gulf also fell again after incurring heavy losses on Sunday, their first day back after the Muslim holiday.

Kuwait Stock Exchange, the second largest in the Arab world, shed 3.45 percent to finish on 11,951.70 points, closing below the 12,000-point mark for the first time in more than 15 months.

It has fallen 6.9 percent in the past two days.

A number of Kuwaiti MPs called on the government to intervene immediately to stop the slide. Kuwait has injected fresh funds over the past fortnight without managing to boost the market.

Kuwaits cabinet summoned the finance and trade ministers to its weekly meeting on Monday to discuss the bourse. The talks were attended by representatives of the bourse, central bank and Kuwait’s sovereign wealth fund.

A cabinet statement quoted the central bank as pledging to pump liquidity into the domestic banking system “whenever needed.”

The same pledge was made two weeks ago, but press reports said the central bank has so far pumped only limited amounts of cash into the banking system.

Dubai Financial Market on Monday dropped 7.6 percent to 3,551.79 points, its lowest level in more than 18 months. The market has lost around 14 percent in the past two days.

Dakkak said that fears about the key property sector had accentuated the falls on the Dubai and Abu Dhabi bourses.

Property giant Emaar — the Dubai market leader — dropped 10.74 percent. It has lost more than 10 percent on each of the past two days.

The property sector in Dubai shed 11.1 percent, while the telecom and utilities sectors each dropped 12 percent.

The second bourse in the United Arab Emirates, the Abu Dhabi Securities Exchange, closed on 3,558.18 points, down 5.6 percent. It has shed a total of 10 percent over the past two days.

Doha Securities Market closed down 4.43 percent on 8,280.89 points, shedding 11.1 percent over two days. Muscat Securities Market dipped 6.7 percent to close on 7,702.85 points, down 9.3 percent in two days.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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