Banking, petrochemical shares drag Saudi markets lower

Saudi Arabian stock market dropped in early trade on Thursday as banking and petrochemical shares declined, while other Gulf markets were mixed.

Saudi Arabia’s index slipped 0.7 percent extending losses for a third day, with Al Rjahi Bank and the country’s largest lender National Commercial Bank both falling 1 percent.

The Gulf’s biggest petrochemical maker Saudi Basic Industries (SABIC) shed 0.8 percent and Sahara International Petrochemical (Sipchem), which traded ex-dividend, plunged 4.3 percent.

On Monday, Fitch downgraded Saudi Arabia’s credit rating to A from A+, citing rising geopolitical and military tensions in the Gulf following an attack on Saudi oil facilities and a deterioration of the kingdom’s fiscal position.

Government data showed on Monday that Saudi Arabia’s economy slowed sharply in the second quarter amid oil output cuts by the world’s largest crude exporter, raising fears of an economic contraction this year.

Last month, rating agency Moody’s cut its forecast for Saudi economic growth in 2019 to 0.3 percent from its previous projection of 1.5 percent on expectation of lower oil output from the kingdom for the rest of the year.

Qatar’s index was down 0.2 in a drag led by banking shares with the Gulf’s largest lender Qatar National Bank sliding 0.6 percent. Qatar Gas Transport shed 1.8 percent.

Qatar’s economy contracted by 1.4 percent in the second quarter compared to a year earlier, hurt by a drop in the manufacturing and construction sectors.

In Abu Dhabi, the index was up 0.2 percent after three days of consecutive losses. Abu Dhabi Commercial Bank was up 1 percent, while Emirates Telecommunications edged up 0.4 percent.

Dubai’s index rose 0.4 percent with blue-chip developer Emaar Properties advancing 1.4 percent and Dubai Islamic Bank gaining 0.8 percent.

On Monday, the Director General of Dubai Economy said the government forecasts Dubai’s GDP to grow 2.1 percent in 2019, 3.8 percent in 2020 and 2.8 percent in 2021.

Source: Reuters