Saudi stock market plunges to nearly eight-month low

Saudi Arabia’s stock market fell sharply to hit a near eight month low on Monday, as oil prices weighed on its financial and petrochemical shares, while other major Gulf markets slid in early trading.

Saudi’s index slumped 2.5 per cent, with Seera Group dropping 4.7 per cent after the travel operator posted a 40 per cent drop in its first-quarter net profit, citing competitive pricing and higher costs.

Oil prices tumbled after President Donald Trump said he would sharply hike tariffs on Chinese goods this week, risking the derailment of trade talks between the world’s two biggest economies.

Last week, Saudi local investors were the net sellers of stocks, representing 85.8 per cent of total selling activity, according to the stock exchange.

Yanbu National Petrochemicals and Advanced Petrochemicals fell 3.4 per cent and 3.7 per cent, receptively.

Saudi Arabia’s index added 1.3 per cent last week as it saw a second tranche of stocks included in the FTSE Russell emerging market index, Al Mal Capital said in a note.

Saudi’s Tadawul index has a weighting of 2.9 per cent in the FTSE Emerging All Cap Index and will join the MSCI emerging market benchmark. The market is positioned for passive fund inflows of around $20bn.

Qatar’s blue-chip index lost 0.9 per cent, pressured by its financial stocks. Doha Bank and Qatar Fuel fell 3.3 per cent and 2.4 per cent, receptively.

The index has risen 0.7 per cent this year, and it was up only 0.6 per cent until last week, making it the second-worst performing Gulf market after Oman.

Out of 10 fund managers polled, most said they would keep their investments in Qatar at the same level, while 40 per cent said they would decrease them, according to a Reuters poll last week.

The Dubai index lost 0.1 per cent, weighed down by Islamic insurer Dar Al Takaful falling 3.7 per cent and Islamic Arab Insurance Co sliding 1 per cent.

Dubai Investments edged down 0.7 per cent after posting lower net profit for its first-quarter.

Abu Dhabi’s index slipped 0.4 per cent, with property developer RAK Properties shedding 1.8 per cent after it reported a 84 per cent slump in first-quarter net profit.