JEDDAH: KHALIL HANWARE
Published — Monday 26 November 2012
Last update 26 November 2012 1:25 am
Saudi Arabia's shares slumped to a 10-month low yesterday as the political developments in Egypt spooked regional investors.
The Tadawul All-Share Index dropped 2.1 percent to its lowest close since Jan. 25 and marked its biggest one-day loss since early June.
Egypt's stock index tumbled 9.6 percent to 4,918 points yesterday.
A Kingdom-based analyst, who preferred anonymity, said recent measures announced by the Labor Ministry to enforce new fees on foreign workers were also causing concern among some investors.
“The measures are posing a threat to the private business, which may lead to deterioration in the private sector activities due to the increase in labor costs,” said the analyst.
The Kingdom's heavyweight sectors — petrochemicals and banking — were the main drag.
Saudi Basic Industries Corp fell 2.3 percent. Al-Rajhi Bank dropped 1.2 percent and Samba Financial Group shed 2.2 percent. The insurance index dropped 6 percent.
Basil Al-Ghalayini, CEO of BMG Financial Group, said: “Obviously, the decline, driven by the petrochemical sector, is another indication of how the Saudi market's movement is also influenced by key regional and international markets’ movements.”
A recent report from the National Commercial Bank that analyzed last month's market performance said investor appetite continued to deteriorate on a monthly basis as the level of activity dropped drastically during October. But it said numerous companies had reported strong growth in profitability and the leading sector last month, energy, posted a 3.3 percent gain during October.