Saudi stock markets open down as investors abandon blue-chips

Saudi stock markets opened down on Tuesday as investors shied away from blue-chip names, while other Gulf markets were largely flat as investors remain worried about the outlook for oil prices.

Oil prices rose on Tuesday after Libya declared force majeure on some of its supplies, but high fuel prices and trade disputes are threatening to crimp demand.

Al Rajhi Bank opened 0.9 percent down, while Saudi Basic Industries Corporation was 0.5 percent down.

Both are among the largest names on the index and have been among the main beneficiaries of a huge inflow of foreign investment in recent months in anticipation of the bourse’s upgrade to emerging markets status.

The Saudi index was lower at 0.5 percent.

In Dubai, shares of Drake & Scull International sank 9.9 percent in early trading, bringing losses so far this week to 27 percent and 73 percent in the year to date, making it one of the worst performing stocks on the Dubai index.

DSI has been lagging as a result of concerns about its financial position, business outlook and the outcome of a probe into “violations” by previous management.

Shares in Air Arabia dipped 0.9 percent after Goldman Sachs cut the airline’s target price to 0.90 dirhams per share from 1.37 dirhams.

The airline said on June 20 it had a $336 million exposure to Abraaj, the private equity company that is filing for provisional liquidation.

Goldman Sachs said the total exposure represents around 25 percent of Air Arabia’s market capitalisation. Dubai shares were flat.

Gulf General Investments Co was the largest climber, up 1.9 percent after the company said on Monday it had received regulatory approval to reduce its share capital to 586.7 million dirhams from 1.79 billion dirhams, with the move taking affect from July 15.

Abu Dhabi’s index was also little changed. First Abu Dhabi Bank was the main gainer, adding 0.4 percent.

Source: Reuters