Saudi stocks hit new six-month low

Saudi Arabian shares closed at a new six-month low yesterday on selling in financial stocks, while Dubai stocks slipped more than 1 per cent, hurt by Emaar Properties, as risk-aversion spread across most Gulf markets.

The Egyptian index fell 3.4 per cent to end the session at 14,796, the lowest close since February 13. The index, which hit a record high of 18,414 points in April, is now downmore than 1 per cent year-todate.

The Saudi index closed 1.6 per cent lower at 7,470 points, the lowest since March 7, as emerging market volatility continued to weigh on regional markets.

The index has lost more than 9 per cent in value this quarter. Banks took the brunt of the losses, with Samba Financial Group falling 3.3 per cent and National Commercial Bank dropping almost 3 per cent.

“There appears to be selling pressure from domestic institutions in Saudi Arabia ,” said Nishit Lakhotia, head of research at Bahrain-based Sico.

Saudi Basic Industries, which fell 1.4 per cent, has been under pressure after news reports that Saudi Aramco may buy a controlling stake in the petrochemicals company at a discount.

Aramco said last week that recent media reports about apotential transaction between Aramco and Sabic were “entirely speculative”.

Saudi Real Estate, however, was up 4 per cent after its unit Al Widyan awarded a 1.1 billion riyals contract to a company to develop key infrastructure on a site in the northern growth corridor of Riyadh.

The Dubai index fell 0.8 per cent, hit by a 3.2 per cent drop in Emaar Properties and a 2.3 per cent fall in Emirates NBD.

Drake & Scull ended 0.5 per cent lower, erasing some of its early losses when it hit a record low of Dh0.376. It closed at Dh0.4.

The partial recovery was helped by a statement of support from Tabarak Investment, DSI’s biggest shareholder with a 13.7 per cent stake.

Tabarak said in a statement at the weekend it was committed to restoring DSI to financial health, and had arranged for the company to obtain over 1 billion dirhams of projects.

The Abu Dhabi index was up 0.6 per cent, supported by market heavyweight First Abu Dhabi Bank, which gained 0.8 per cent, and a 4.2 per cent gain in United Arab Bank.