MIDEAST STOCKS-Gulf slides in response to Wall Street's tumble
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MIDEAST STOCKS-Gulf slides in response to Wall Street's tumble
DUBAI, Feb 4 (Reuters) – Gulf stock markets sank early on Sunday in response to Friday’s tumble on Wall Street, after U.S. data showed the strongest annual wage growth since 2009 and raised the risk of more interest rate hikes than expected this year.
The Saudi index dropped 0.6 percent in the first hour with falling shares outnumbering gainers by a ratio of about two to one. Al Rajhi Bank, which rose strongly in January, partly on expectations it will be included in global emerging market indexes when Saudi Arabia is eventually upgraded to that status, fell back 1.2 percent.
Mediterranean & Gulf Cooperative Insurance and Reinsurance plunged 7.5 percent after the Capital Market Authority said it might suspend or cancel trade in the stock, after the central bank prohibited the firm from issuing or renewing policies pending a capital increase to address a low solvency margin.
But Wataniya Insurance gained 2.8 percent after saying it signed a deal with National Commercial Bank to provide auto insurance for vehicles sold by the bank under its financial leasing programme, which could help the company benefit from the planned lifting of the ban on women driving later this year.
Several cement shares stayed strong after a media report last week saying the government had started awarding contracts to establish its huge NEOM business zone in the northwest of the country. Tabuk Cement, which is located near the site of NEOM, rose a further 1.8 percent.
Dubai’s index slid 0.8 percent as Emaar Properties , which like other real estate firms could face tougher business conditions if higher U.S. interest rates are passed on through the Gulf’s currency pegs, fell 1.7 percent.
Gulf Navigation dropped 3.7 percent to 1.05 dirhams as some investors sold to buy into its rights issue, which began trading on Sunday. The rights, which provide the opportunity to buy the stock at a price of 1.0 dirham, were the most heavily traded counter in the market.
Qatar’s index tumbled 1.9 percent with real estate firms particularly weak; United Development lost 3.4 percent and Barwa Real Estate slipped 2.9 percent. (Reporting by Andrew Torchia; editing by Jason Neely)
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