Banks bolster Dubai index; Saudi plunges
dubai — Saudi Arabia’s stock market fell sharply on Wednesday after oil prices sank and the government released its 2019 budget, while Dubai rebounded on the back of a rise in bank shares.
Brent oil fell below $56 a barrel to its lowest level in more than a year, pushing the Saudi stock index down 1.1 per cent in its biggest one-day drop since late November.
Petrochemical shares fell, with Saudi Basic Industries dropping 2.4 per cent, and Al Rajhi Bank shedding 1.4 per cent.
The state budget promised a 7 per cent spending rise next year in an effort to spur sluggish economic growth, but that figure had already been flagged in a pre-budget announcement.
In Dubai, the index rose 1.3 per cent after falling 2.1 per cent in the last session.
While valuations are attractive, there was no rush for investors to build positions, Vrajesh Bhandari, portfolio manager at Al Mal Capital in Dubai, said. However, some flows may be going into highyielding stocks before annual dividends are announced early next year, he added.
Dubai’s largest lender Emirates NBD, which jumped 5.3 per cent, offers an 8.53 per cent dividend yield for next 12 months, according to Refinitiv data.
Dubai Investments, another high-yielding stock, climbed 1.6 per cent, while Damac Properties increased 4.2 per cent after hitting a multi-year low in the last session.
The Abu Dhabi index added 0.6 per cent with First Abu Dhabi Bank, the UAE’s biggest lender, climbing 1.3 per cent. Abu Dhabi National Energy Co, which had slumped 9.1 perc ent in the last session, rebounded 4.4 per cent in low volume.
Egypt’s blue-chip index edged down 0.3 per cent.
In Oman, the index lost 1 percent, its biggest one-day drop since September, after ratings agency Fitch downgraded the country’s credit rating to “junk”, citing fiscal challenges to the oil producer from volatile crude prices.
Banks, which could face higher overseas funding costs as a result, were hit with Bank Muscat shedding 1.9 per cent and Bank Sohar slipping 2.6 per cent.