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Stock News: Gulf Markets Fall On Weak Oil

Stock News: Gulf Markets Fall On Weak Oil

Dubai’s index dropped 3.4 per cent as all but a handful of stocks fell.

Gulf stock markets extended their decline in early trade on Monday after the price of Brent crude oil fell below $56 per barrel.

Brent futures hit a fresh 5-1/2-year low of $55.25 as data showed that Russian output and Iraq’s exports of the commodity had hit their highest levels in decades.

Although Saudi Arabia, Dubai and Oman have already announced large state budgets, suggesting that lower oil revenues will not translate into spending cuts, crude prices continue to affect the sentiment of retail investors who dominate local markets.

Saudi Arabia’s main index fell 1.6 per cent as shares in petrochemicals giant Saudi Basic Industries (SABIC) dropped 2.8 per cent.

However, shares in SABIC unit Saudi Arabia Fertilizer Co (SAFCO) jumped 2.4 per cent after its board recommended a bonus share issue of one share for each outstanding four shares.

The bonus issue offset news of a disappointing dividend; SAFCO’s board proposed a cash dividend of SAR3 per share for the second half of 2014, down from SAR6 a year earlier. That would make the total 2014 payout 7 riyals while analysts polled by Reuters had expected, on average, SAR9.6, down from SAR12 in 2013.

Dubai’s index dropped 3.4 per cent as all but a handful of stocks fell.

Bahrain’s Gulf Finance House (GFH) was one of the few gainers, jumping 3.7 per cent after the company said it had won a $11.5 million legal case pertaining to its investment in a Qatari firm.

A court in Bahrain has also dismissed a $13.8 million case filed against GFH by former chairman Essam Janahi, who resigned in 2013, it said in a separate statement.

Abu Dhabi’s index edged down 0.4 per cent as Aldar Properties, the emirate’s biggest listed developer, dropped 3.2 per cent.

Qatar’s bourse lost 1.2 per cent in another broad sell-off, while Oman and Kuwait edged down 0.7 and 0.9 per cent respectively.

Egypt’s market remained more upbeat and the Cairo index edged up 0.2 per cent. Bidding wars for local companies such as Bisco Misr and Arab Dairy Products have underscored the growing interest in local equities.

Swiss-listed Orascom Development Holding AG said on Monday it had sold a 15 per cent stake in its Egyptian subsidiary, Orascom Hotels and Development, for 506.1 million pounds ($70.78 million) and a public offer for those shares was 3.8 times oversubscribed.

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