Gulf indexes lower on tepid global stocks

The Saudi market fell yesterday, as plunging oil prices pressured petrochemical stocks, while Riyad Bank was the top gainer, reaching a four-year high after saying it was in merger talks with National Commercial Bank.

The Dubai index was the sole gainer of the session, inching up on the back of rises in its banking shares, with most major Arabian Gulf bourses slipping on tepid global sentiment and weak oil prices.

Oil prices plunged to their lowest level in more than a year on Monday, as fears of an economic slowdown weighed on the market.

The Saudi index was down 0.6 per cent, with Al Rajhi Bank falling 1.6 per cent, Saudi Basic Industries losing 1.5 per cent and Saudi Arabian Mining shedding 2.3 per cent.

But Riyad Bank jumped 8.2 per cent to its highest level since November 2014, after saying that National Commercial Bank, the kingdom’s biggest lender by assets had begun discussions to merge with the firm. National Commercial Bank was up 1.5 per cent.

Consolidation among smaller lenders has increased in the past two years as profit margins have been squeezed by lower government and consumer spending in the face of weak oil prices.

Arab National Bank also rose 3 per cent after its board recommended a capital increase to 15 billion riyals.

The Dubai index ended three straight days of losses, inching up 0.3 per cent after hitting a five-year low on Monday.

Dubai’s weak real estate market has been a big drag on property shares this year with Emaar Properties down more than a third year-to-date. Emirates NBD, Dubai’s biggest bank, rose 4.2 pe rcent, while Mashreq Bank gained 8.3 per cent.

Abu Dhabi’s main index slid 0.4 per cent. Emirates Telecommunications Group was down 0.8 per cent, and Abu Dhabi Commercial Bank fell 1.4 per cent.

Dana Gas shed 3.1 per cent in light trade. The company said Goldilocks Investment has increased its holding in the firm to 5.2 per cent.

The Egyptian blue-chip index fell 0.9 per cent with Egypt’s largest lender, Commercial International Bank, losing 0.9 per cent, and Eastern Company also losing 0.9 per cent.

Qatar’s index declined 1.3 per cent with Islamic bank Masraf Al Rayan falling 2.6 per cent.