DUBAI: Most Gulf Arab bourses fell across the region on Monday, reversing the previous day’s gains, as they tracked weaker global markets and drifting oil prices, with Saudi Arabia the only market to rise.
“Oil is below $66 and Asian markets sold off quite sharply. Global sentiment is weighing on regional markets,” says Shahid Hameed, head of asset management, GCC, Global Investment House.
In Oman, Bank Muscat suffered its biggest one-day fall since July 13 after the country’s central bank governor said that banks in his country may need to take additional provisions on bad debt due to exposure to troubled Saudi conglomerates.
Bank Muscat dropped 4 percent as the country’s benchmark fell 2.3 percent after four trading days of gains.
Other banks followed with National Bank of Oman falling more than 3 percent and Oman International Bank more than 2 percent.
Saudi Arabia’s benchmark TASI bucked the trend, rising for an eighth consecutive trading day.
The market closed with gains of 48.93 points, with only one sector closing with a loss, namely the media and publishing sector, which was down 0.40 percent. Whereas the sector gains ranged across the other 14 sectors, from 0.02 percent in the real estate development sector to 3.22 percent in the insurance sector.
Overall market breadth was positive, with 84 advancers and 27 decliners, giving an AD ratio of 3.11. “Although there are indicators that the market may be oversold with the RSI still above 70, any sudden strong profit taking, although anticipated, will be harmful for investor confidence,” said the Jeddah-based Financial Transaction House (FTH) in its daily market commentary.
In the United Arab Emirates, real estate stocks helped steer Dubai and Abu Dhabi lower with Emaar Properties falling 3.7 percent and Sorouh Real Estate declining 4.1 percent, their biggest one-day falls since August. “We are seeing natural profit-taking today but I think it will be shortlived and the general trend is upwards between now and the end of the year,” said Haissam Arabi, chief executive of Gulf Mena Alternative Investments in Dubai.
“We need third quarter results to bring in volumes to get the market to break above 2,200 points,” he said.
House prices in Dubai are expected to fall further in the short term due to oversupply, Jones Lang LaSalle said on Sunday.
Other Dubai real estate stocks came also under pressure.
Kuwait fell after four days of gains while Bahrain fell after two days of rises.
Dubai’s main measure DFMGI slipped 2.6 percent to 2,140 points. Abu Dhabi’s ADI index eased 1.1 percent to 3,089 points.
The Qatari bourse declined 1 percent to 7,437 points.
Kuwait’s benchmark lost 0.7 percent to 7,842 points.
Bahrain’s benchmark BAX eased 0.2 percent to 1,554 points.