Reuters
Most Gulf markets fell yesterday as uncertainty about oil prices prompted investors to sell stocks, while energy importer Egypt posted strong gains.
Brent crude traded below $79 a barrel yesterday after Saudi Arabia signalled it was unlikely to push for a major change in Opec oil output despite a collapse in prices.
Saudi Arabian Oil Minister Ali al-Naimi said he expected oil “to stabilise itself eventually”, a comment traders understood to mean that the cartel would not cut output when oil ministers from the Organisation of the Petroleum Exporting Countries (Opec) meet today in Vienna.
Although oil-exporting Gulf nations have built up large reserves over the last few years when crude traded above $100 per barrel, some investors fear that a sharp decline in budget revenues could trigger a cut in government spending, a key driver of economic growth throughout the region. Saudi Arabia’s index fell 1.7% to 9,081 points, its lowest level since early March, as most shares declined. Heavyweights Saudi Basic Industries and National Commercial Bank each fell 1.1%.
The market, however, closed well above its intraday low of 8,922 points, which would have been a 3.4% decline.
Advanced Petrochemical Co was one of a few shares to buck downbeat the trend, adding 0.6%.
The company said yesterday it would pay a 0.75 riyals fourth-quarter dividend, taking the full-year payout to 3.0 riyals, up from 2.25 riyals last year. Dubai’s bourse dropped 2.5% after losing support from global funds which were buying several stocks on Tuesday because their weightings increased in MSCI’s emerging markets index.
Emaar Properties, which had been the main beneficiary of such inflows, tumbled 5.3% to 10.75 dirhams, falling below immediate support at 11.15 dirhams which was its November high until this week. Abu Dhabi’s index fell 0.9% and First Gulf Bank was the main drag, dropping 2.4% after also losing support from one-off buying related to MSCI index adjustments.
Oman’s market is much smaller and less liquid while in Abu Dhabi a bulk of dividends comes from Etisalat whose shares can only be held by the UAE citizens. Egypt’s index rose 1.3% in a broad rebound ahead of a central bank meeting widely expected to keep interest rates on hold to support economic growth.
Ezz Steel jumped 4.1% and led gains after an appeals court on Tuesday lowered a fine for monopolistic practices levied against founder Ahmed Ezz to £10mn ($1.40mn) from £100mn.
As an oil importer, Egypt stands to benefit from cheaper crude, although some market players are worried it could affect the flow of financial aid from the Gulf on which the Cairo government relies heavily.
Orascom Hotels and Development’s said its nine-month net profit reached 36.4mn Swiss francs after a 75.8mn Swiss francs loss in same period last year. Elsewhere, Kuwait index slipped 0.1% to 7,020 points and Bahrain index edged down 0.2% to 1,441 points.
