Mideast shares tumble, Saudi retreats to 6-month low

Saudi TASI slides a tenth day, slumping 4.5% to 5,983.5, the lowest since Aug 25
Mideast shares tumble, Saudi retreats to 6-month low
STOCK WATCH: Oman’s benchmark MSM 30 Index dropped to 6,458.37, the lowest since September, led by Renaissance Services (Getty Images)
By Bloomberg
Sun 27 Feb 2011 12:22 PM

Middle East shares fell, sending
Saudi Arabia's index to a six-month low, on concern deadly clashes in Libya
that caused oil prices to surge to a more than two-year high will stall a
global recovery.

Al Rajhi Bank, the kingdom’s largest
publicly traded lender by market value, dropped 4.2 percent and Saudi Basic
Industries Corp, the world’s largest petrochemicals maker, tumbled to the
lowest intraday level since October.

Saudi Arabia’s Tadawul All Share Index
slid a tenth day, slumping 4.5 percent to 5,983.5, the lowest since August 25,
at 2:11pm in Riyadh.

The measure has lost 11 percent
since Tunisia’s former president Zine El Abidine Ben Ali fled the country amid
protests that spurred similar uprisings in nations across the region. Oman’s
measure decreased 2.8 percent as protest erupted in the sultanate.

“With no clear end to the
geo-political turmoil in the region, local investors are erring on the side of
caution,” said Amro Halwani, senior equity sales trader at Shuaa Capital in
Riyadh.

“The regional uncertainty, with
Libya this week’s reason to sell, has pushed fundamentals out of the picture.
The surge in oil is an ongoing threat of a possible derailing in the global
economic recovery, and gave investors a reason to move away from riskier
assets.”

The United Nations Security Council
voted to freeze the foreign assets of Libyan leader Muammar Qaddafi and four
aides and to bar them from traveling, in the broadest international effort to
halt the attacks. Protests calling for the ouster of Qaddafi have been met with
a violent crackdown. The leader has bolstered defenses in the capital, Tripoli,
and launched counter-strikes against opponents who have seized much of the rest
of the country.

Crude for April delivery surged as
much as 5.4 percent to $103.41 a barrel on February 24, the highest intraday
price since September 2008, on estimates that Libya has lost as much as two-
thirds of its oil output. Libya is the largest holder of crude oil reserves on
the African continent.

Al Rajhi fell the most since May 25
to SR73.75 and Sabic decreased 2.6 percent to SR93.75, the lowest since October
26.

In Oman, police fired tear gas at
stone-throwing protesters in the industrial city of Sohar, Reuters reported,
citing unidentified witnesses. The protesters were demanding political reforms,
it said. Demonstrations were also taking place in the southern town of Salalah.

Oman’s benchmark MSM 30 Index
dropped to 6,458.37, the lowest since September, led by Renaissance Services.
The provider of services to the oil and gas industry slumped 6.8 percent to SR1.085,
the lowest since December 21.

Dubai’s DFM General Index fell 0.9
percent after earlier rising as much as 1.9 percent. Emaar Properties, builder
of the world’s taller skyscraper, dropped to the lowest since February 2010,
losing 2.4 percent to AED2.85. The shares had earlier gained as much as 2.1 percent
and are down 20 percent so far this year. Abu Dhabi’s General Index climbed 0.6
percent.

“We will see heightened volatility
until we see a clear resolution to the unrest in the region,” said Omair
Ansari, equity strategist at Gulfmena Alternative Investments in Dubai. “With
lack of market participation by many institutional investors, spikes are
occurring on low volumes led by retail.”

Bahrain’s BB All Share Index
advanced 0.3 percent, while Qatar’s QE Index slipped 0.2 percent. Kuwait’s
bourse is closed for a national holiday.

 

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