Saudi Arabia’s benchmark stock index plunged the most since November 2008 and entered bear-market territory on concern political unrest in the Middle East may spread to the kingdom.
Al-Rajhi Bank fell to the lowest in a year and Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, tumbled 7.8 percent. Saudi Arabia’s Tadawul All Share Index slumped 6.8 percent to 5,538.72 at the 3:30 p.m. close in Riyadh. The measure has lost 20 percent since reaching its 2010 high, the common definition of a bear market. Credit-default swaps linked to Saudi Arabia, used as a measure of confidence although they reference no debt, rose 4 basis points to 140, according to CMA prices in London.
“Performance in Saudi exemplifies that geo-political risk still remains unresolved within the region,” said Omair Ansari, equity strategist at Gulfmena Alternative Investments in Dubai. “We still have rumors of protests within the kingdom for March 11 and 20, which provides for a level of uncertainty, even if they do not transpire. Markets will continue to capitulate due to the inability to price in top-down risk.”
Political turmoil in the region has spread to the Persian Gulf, with protests erupting in Oman and Bahrain inspired by popular uprisings that toppled leaders in Tunisia and Egypt. Websites have called for a nationwide Saudi “Day of Rage” on March 11 and March 20, Human Rights Watch said in a statement yesterday.
‘Flooded With Fear’
“The market is flooded with fear and investors cannot seem to find anything that reassures them of a possible light at the end of the tunnel,” said Amro Halwani, senior equity sales trader at Shuaa Capital PSC in Riyadh. “Right now it’s a rumor- driven market and cash seems to be the safest place to be in.”
Prince Talal Bin Abdul Aziz Al Saud, a member of Saudi Arabia’s royal family, said on Feb. 17 that the kingdom may see protests unless King Abdullah introduces reforms, according to BBC Arabic TV.
The king boosted spending on housing by 40 billion riyals ($10.7 billion) on Feb. 23. The social security budget was raised by 1 billion riyals and he also ordered the creation of 1,200 jobs in supervision programs and made permanent a 15 percent cost-of-living allowance for government employees, according to a statement on state-run television.
Saudi Arabia is the world’s biggest exporter of oil and the largest Arab economy. Crude gained 0.9 percent to $97.81 a barrel at 8 a.m. in electronic trading on the New York Mercantile Exchange.
Cleric
Authorities “should immediately release” Tawfiq al-Amir, a Shiite cleric in the country, who was apparently arrested after he called for a constitutional monarchy and equal rights for the Shiite minority, Human Rights Watch said in its statement.
Al-Rajhi, the country’s largest publicly traded lender by market value, fell 2.7 percent to 71.5 riyals, the lowest since January 2010. Sabic decreased to 86 riyals, the lowest since Sept. 1.
Oman’s measure surged 4.1 percent after slumping 4.9 percent yesterday. The DFM General Index rose 1 percent. Kuwait’s SE Price Index dropped 2.5 percent and Bahrain’s BB All Share Index fell 0.5 percent. Abu Dhabi’s ADX General Index retreated 0.6 percent.
To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net; Alaa Shahine in Dubai at asalha@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
Al-Rajhi Bank fell to the lowest in a year and Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, tumbled 7.8 percent. Saudi Arabia’s Tadawul All Share Index slumped 6.8 percent to 5,538.72 at the 3:30 p.m. close in Riyadh. The measure has lost 20 percent since reaching its 2010 high, the common definition of a bear market. Credit-default swaps linked to Saudi Arabia, used as a measure of confidence although they reference no debt, rose 4 basis points to 140, according to CMA prices in London.
“Performance in Saudi exemplifies that geo-political risk still remains unresolved within the region,” said Omair Ansari, equity strategist at Gulfmena Alternative Investments in Dubai. “We still have rumors of protests within the kingdom for March 11 and 20, which provides for a level of uncertainty, even if they do not transpire. Markets will continue to capitulate due to the inability to price in top-down risk.”
Political turmoil in the region has spread to the Persian Gulf, with protests erupting in Oman and Bahrain inspired by popular uprisings that toppled leaders in Tunisia and Egypt. Websites have called for a nationwide Saudi “Day of Rage” on March 11 and March 20, Human Rights Watch said in a statement yesterday.
‘Flooded With Fear’
“The market is flooded with fear and investors cannot seem to find anything that reassures them of a possible light at the end of the tunnel,” said Amro Halwani, senior equity sales trader at Shuaa Capital PSC in Riyadh. “Right now it’s a rumor- driven market and cash seems to be the safest place to be in.”
Prince Talal Bin Abdul Aziz Al Saud, a member of Saudi Arabia’s royal family, said on Feb. 17 that the kingdom may see protests unless King Abdullah introduces reforms, according to BBC Arabic TV.
The king boosted spending on housing by 40 billion riyals ($10.7 billion) on Feb. 23. The social security budget was raised by 1 billion riyals and he also ordered the creation of 1,200 jobs in supervision programs and made permanent a 15 percent cost-of-living allowance for government employees, according to a statement on state-run television.
Saudi Arabia is the world’s biggest exporter of oil and the largest Arab economy. Crude gained 0.9 percent to $97.81 a barrel at 8 a.m. in electronic trading on the New York Mercantile Exchange.
Cleric
Authorities “should immediately release” Tawfiq al-Amir, a Shiite cleric in the country, who was apparently arrested after he called for a constitutional monarchy and equal rights for the Shiite minority, Human Rights Watch said in its statement.
Al-Rajhi, the country’s largest publicly traded lender by market value, fell 2.7 percent to 71.5 riyals, the lowest since January 2010. Sabic decreased to 86 riyals, the lowest since Sept. 1.
Oman’s measure surged 4.1 percent after slumping 4.9 percent yesterday. The DFM General Index rose 1 percent. Kuwait’s SE Price Index dropped 2.5 percent and Bahrain’s BB All Share Index fell 0.5 percent. Abu Dhabi’s ADX General Index retreated 0.6 percent.
To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net; Alaa Shahine in Dubai at asalha@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
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