DUBAI: Most Gulf markets fell for a second day yesterday as bank stocks faltered on worries that write downs from two Saudi conglomerates might be larger than expected.
Declines in US and Asian stocks and share disputes in Dubai and Kuwait soured sentiment further as Abu Dhabi fell 2.2 percent, its biggest one-day loss since late April, and Qatar had its largest decline in three weeks as investors cashed in recent gains.
Dubai and Kuwait also retreated, but Saudi Arabia, Oman and Bahrain made minor advances. Egypt climbed 1.1 percent.
Bank shares stumbled across the region after two central bankers warned Gulf Arab banks were facing bigger provisions from Saudi Arabia’s Saad Group and Ahmad Hamad Al-Gosaibi & Brothers Co. (AHAB) than previously thought.
“This has had a negative impact on bank stock prices, particularly in Saudi Arabia where you would expect most of the exposure to be,” says Shahid Hameed, Global Investment House head of asset management for the Gulf region.
Regional losses mirrored declines on world markets late yesterday and early today, with Wall Street’s largest fall for more than a month spurring Gulf traders to sell. European stocks rebounded and oil prices rallied toward $72 a barrel, boosting the later-closing Saudi index TASI, which reversed early losses to end 0.2 percent higher at 6,062 points.
Jeddah’s Financial Transaction House described it as “a positive close with minor gains after testing a level below 6,000 at 5,966 where a support was found at the uptrend line with a close above the middle line of Bollinger Bands.”
Dubai’s index fell 2.4 percent in early trading as residual selling from the day before weighed on stocks, but it recouped most of the losses to end 0.2 percent lower.
Shuaa Capital slumped as a row with Dubai Banking Group deepened. Shuaa jumped 14.5 percent intraday after the investment bank said it had issued 250 million shares to try to settle a long-running dispute with Dubai Banking Group over a 1.5 billion dirham ($408.5 million) convertible bond. But Dubai Banking Group swiftly said it would not accept delivery of the shares, sending Shuaa tumbling to end down 1.7 percent. A statement from the Dubai Financial Market said it would not register the new shares in Dubai Banking Group’s name until it receives written request to do so from both parties.
— With input from agencies
