Markets fall again on Greece; no panic in Tunisia
Saudi petchems, Ma’aden drag down stock index 9m bbls sold since mid-June
DUBAI, June 29, (RTRS): The Greek debt crisis continued to push down Middle Eastern stock markets on Monday after Athens imposed capital controls and shut banks, raising the prospect of Greece leaving the euro zone.
Gulf economies are better insulated from such an event than many areas of the world, because they do not depend on foreign investment and governments can use huge fiscal reserves to continue spending heavily.
But market sentiment in the region was hurt by a broad slide of Asian and European stocks and a near 2 percent drop in Brent oil to just above $62.0 a barrel.
Saudi Arabia’s stock index slid 1.6 percent. Petrochemicals giant Saudi Basic Industries, whose earnings would be depressed by lower oil prices, sank 2.4 percent. Mining company Ma’aden tumbled 5.0 percent.
But Saudi Ground Services, which listed last Thursday, jumped its 10 percent daily limit for a third day in a row to 66.50 riyals. SICO started the stock with a buy rating and a target price of 74 riyals.
Dubai’s index slipped 0.3 percent. Property developers, which could see European investors’ demand for their real estate hit by any fresh euro zone crisis, were weak; Emaar lost 0.4 percent.
But top Dubai bank Emirates NBD, a creditor of Limitless, gained 2.2 percent after the real estate developer reported progress in its debt restructuring. Limitless said it would repay 2.07 billion dirhams ($564 million) to creditors and had won the approval of almost 90 percent of banks to extend its remaining debt to December 2018.
Abu Dhabi’s index dropped 0.8 percent as Etisalat lost 2.9 percent after saying a further earnings restatement and provisions at its Saudi Arabian unit Etihad Etisalat would hit its own earnings.
Egypt’s market slid 1.7 percent; a fresh economic slump in Europe could hurt a key export market and deprive it of tourism revenue. Global Telecom dropped 1.9 percent.
Tunisia’s stock market reopened and fell 1.0 percent after Friday’s attack on a holiday resort which killed 39 people. Before the attack, it was trading near record highs.
The attack is expected to slow Tunisia’s economy and hit reserves by damaging its tourist industry, a major source of foreign currency.
But the modest scale of the market’s fall on Monday suggested investors were not panicking, and fund managers believe any balance of payments crisis is unlikely, given the country’s comfortable level of foreign reserves and its ability to count on Western aid.
The Tunisian dinar also dropped moderately on Monday. It fell as much as 1.1 percent in early trade but then rebounded to stand about 0.6 percent lower at 1.9546 to the US dollar. The Tunisian central bank has in the past supplied dollars when needed to prevent sharp moves of the currency.
After the Bardo museum attack in Tunis last March, which killed 23 people, the Tunisian stock market immediately fell 2.5 percent, but it began recovering the next day and regained its pre-attack level within three weeks.
Saudi Arabia
The index fell 1.6 percent 9,060 points.
Dubai
The index slipped 0.3 percent to
4,042 points.
Abu Dhabi
The index dropped 0.8 percent to 4,680 points.
Qatar
The index slid 0.6 percent to 12,014 points.
Egypt
The index dropped 1.7 percent to 8,372 points.
Kuwait
The index edged down 0.1 percent to 6,196 points.
Oman
The index edged down 0.01 percent to 6,431 points.
Bahrain
The index edged up 0.2 percent to 1,367 points.