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Sat 5 Dec 2009 12:52 PM

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Saudi bourse falls 1.1% as banks decline

Al Rajhi Bank, Samba Financial Group drop on first day after Saudi's TASI opens.

Saudi shares TASI fell 1.1 percent in the first session since Dubai World alarmed markets with a request for a delay in debt repayment but analysts see no great impact on the Arab world's biggest bourse.

The main index fell 1.06 percent to 6,288.27 points after having opened down 2.3 percent.

Among biggest losers are banks with
Al Rajhi Bank

, the country's biggest Islamic lender, last trading down 2.6 percent.
Samba Financial Group

was down 3.2 percent, while
Banque Saudi Fransi

ended down two percent.

The decline comes after Saudi Arabia Central Bank Governor Muhammad Al Jasser said local banks' exposure to Dubai World is very limited.

"Saudi exposure to Dubai is not significant," Saudi economist Abdul Wahab Abu Dahesh said, putting the total exposure of all local banks to Dubai World at 2.7 billion riyals ($720 million).

He said an overall rise of provisions at Saudi banks this year due to debt problems of some family firms and a decline of operating profit in October was weighing on banks.

The session was the first since Dubai World requested a payment standstill on Nov. 25 for $3.52 billion worth of Islamic bonds maturing this month as it looks to restructure $26 billion worth of debt.

Saudi Basic Industries Corp (SABIC)

fell 1.22 percent. Oil falls $1 on Friday, pressured by a stronger dollar.

Saudi Arabia's index TASI has been the best performing in the Gulf Arab region this year. It last traded on Nov. 25 before the Muslim Eid al-Adha holiday. (Reuters)