Geopo­lit­i­cal ten­sions weigh on Gulf stocks

The National - News - - BUSINESS -

Higher oil prices helped Saudi Ara­bia’s stock mar­ket to off­set some of this week’s losses yes­ter­day, though other Gulf mar­kets were down as geopo­lit­i­cal con­cerns con­tin­ued to weigh on in­vestors in the re­gion.

Trad­ing ac­tiv­ity was also slow be­cause of the Mus­lim fast­ing month of Ra­madan, traders said.

The Saudi index gained 0.7 per cent as Brent crude fu­tures hit $80 a barrel for the first time since Novem­ber 2014 on con­cerns Ira­nian ex­ports could fall, re­duc­ing sup­ply in an al­ready tight­en­ing mar­ket.

The prospects of a sharp drop in Ira­nian oil ex­ports in the com­ing months due to re­newed US sanc­tions have been good to oil prices, but they also raise con­cerns of in­sta­bil­ity in an al­ready con­flict-torn re­gion.

Shares in the en­ergy and petro­chem­i­cal sec­tors rose in Saudi Ara­bia, led by com­pa­nies with big cap­i­tal­i­sa­tions in­clud­ing Saudi Ba­sic In­dus­tries which gained 1.3 per cent and Saudi Kayan Petro­chem­i­cal Com­pany which rose 1.2 per cent. Na­tional Petro­chem­i­cal Co was up 1.5 per cent.

Shares of Saudi Ara­bia’s Alawwal Bank stayed on a pos­i­tive trend with an­other 0.6 per cent gain to 14 Saudi riyals in heavy vol­ume, af­ter a 10 per cent jump on Wed­nes­day.

Alawwal has reached a pre­lim­i­nary, non-bind­ing agree­ment to merge with HSBC-backed Saudi Bri­tish Bank to cre­ate Saudi Ara­bia’s third-big­gest bank with as­sets of about $77 bil­lion.

Other Saudi bank shares were mixed with the king­dom’s big­gest lender, Na­tional Com­mer­cial Bank, gain­ing 4.2 per cent and Saudi Bri­tish Bank fall­ing by 3.3 per cent to 30.88 riyals, ex­tend­ing losses for a sec­ond day. Alinma Bank was also up 1.1 per cent.

In Abu Dhabi, real es­tate de­vel­op­ers Eshraq Prop­er­ties and Al­dar Prop­er­ties were the most heav­ily traded shares, with Al­dar giv­ing up 0.9 per cent.

In Dubai, the index was down 0.6 per cent, dragged lower by Emaar Prop­er­ties and sub­sidiary Emaar De­vel­op­ment, down 1.2 per cent and 0.7 per cent re­spec­tively. GFH Fi­nan­cial helped re­duce the mar­ket losses and rose 2.1 per cent.

In Qatar, the main index, which rose ear­lier this week af­ter it was buoyed by MSCI’s de­ci­sion to in­crease the weight­ings of sev­eral blue chips, was also in neg­a­tive ter­ri­tory, los­ing 0.7 per cent.

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