By Souhail Karam
UPDATE 1: Bank shares lead decline in kingdom, fourth consecutive session in the red.
Banks led Saudi bourse to close down for a fourth consecutive session as investors awaited fourth-quarter earnings amid a negative economic outlook for 2009.
The index closed 2.68 percent lower at 4,543.89 points.
Albilad shed 7.9 percent, Banque Saudi Fransi ended 7.8 percent lower and Saudi Hollandi fell 7.7 percent.
Analysts are concerned over the impact the global crisis may have on the domestic financial system which is also expected to face tighter credit conditions in 2009.
With oil prices expected to be below the records of this year, the Saudi economy is bound to face a slowdown in 2009, says John Sfakianakis, chief economist at HSBC's Saudi subsidiary, SABB bank.
"Consumer spending should slow down as pessimism unfolds ... even if interest rates are fast falling," he wrote in a research note.
Domestic banks do not have the capacity to withstand the financing needed for the $400 billion projects earmarked over the next four years because they are struggling to secure long-term deposits, he says.
"We believe that the private sector will undergo (in 2009) one of its toughest years in its recent past," Sfakianakis adds.
Property developer Emaar Economic City topped traded stocks as investors reacted to news the firm will start in the first quarter delivering the first housing and business units at its main project King Abdullah Economic City.
The stock closed 4.05 percent up at 9 riyals, which is below both its listing price and the nominal value of the share.
Saudi Basic Industries Corp (SABIC) shed 4.8 percent.