Investors panic after Iran threat

INVESTOR PANIC: Markets across much of the Gulf declined on Tuesday following Iran's threat to close the Strait of Hormuz if attacked. (Getty Images)

Stock markets in the Gulf Arab region, bar Oman and Bahrain, declined as investors panic after Iran said it will strike US shipping in the Gulf if is attacked over its disputed nuclear programme.

"It's clear it [Iran's news] is the headline for today's trading across all Gulf Arab markets," said Samer Al-Jaouni, general manager of Middle East Finance Brokerage Co.

"Institutions are holding [on to their shares] and small investors are selling as the market is very sensitive to any political concerns. We are seeing double impact from the Iran news and low-volume summer trading."

Saudi Arabia's main index ended down 2.35 percent, led by losses in Saudi Basic Industries Corp (SABIC).

The benchmark, the worst performer in the Gulf Arab region, closed at 9,293.45 points, as SABIC fell 3.01 percent.

"The [Iran] news could be having a psychological impact on investors," said Hani Boathman, chief executive of Ayaan Capital.

Saudi Arabian Fertilisers Co, which had rallied after posting a near 125 percent rise in second-quarter profit, closed down 0.48 percent.

Stock markets in the United Arab Emirates declined as investors allocated funds for an initial public offering of contractor Drake & Scull that started on Tuesday.

Emaar Properties lead the drop in Dubai, easing 1.44 percent and pulling the benchmark down 0.41 percent to 5,362.91 points.

In Abu Dhabi, First Gulf Bank fell 1.81 percent, dragging the benchmark down 0.81 percent to 5,001.23 points.

"A lot of buying in the UAE has been put on hold, one of the reasons being the Drake & Scull IPO. Many investors would want to allocate money to that, so buying is slowing down," said Mohamed Alami of Naeem Shares & Bonds.

Drake & Scull said it would sell 1.2 billion shares at 1 dirham each with the offer period running July 8-17.

Shares of Dubai jewellery group Damas International surged 5 percent above their initial public offering price on their debut on the Dubai International Financial Exchange (DIFX).

Commercial Bank of Kuwait edged down 1.39 percent and National Industries Holding 2.99 percent, dragging the benchmark 0.18 percent lower to 15,069.80 points.

Qatar's benchmark shed 0.48 percent to 11,897.06 points, led by Qatar Gas Transport Co and Qatar National Bank, which fell 1.83 percent and 1.04 percent respectively.

Oman's main index ended higher for the sixth straight session, helped by shares of Oman Telecommunications Corp (Omantel), which rose after the government kicked off a partial sale of the firm.

Omantel gained 2.13 percent after the government invited investor interest in a 25 percent stake sale.

"The news Omantel is looking for a strategic partner has pushed the share price higher, so smaller players who haven't yet picked up the stock are trying to do that now," said Syed Quadry, a vice president at Amwal Investment.

"The market is in a positive mood and it's a very good time to enter the market because second-quarter results are coming out and they are expected to be strong."

The benchmark ended up 0.16 percent at 11,865.35 points.

Bahrain's main index closed flat at 2,859.20 points.

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