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Sun 19 Jul 2020 03:35 PM

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Kuwait stocks drop with emir in hospital

91-year-old emir, Sheikh Sabah Al-Ahmed Al-Sabah, underwent 'successful surgery' on Sunday after being admitted to hospital

Kuwait stocks drop with emir in hospital

S&P has lowered its outlook for the country’s sovereign rating to negative from stable, citing the impact of oil-production cuts amid the pandemic.

Kuwait’s main equity index led losses in the Middle East after the country’s ruler was hospitalised over the weekend and S&P Global Ratings downgraded the prospects for the economy.

The Premier Market index of the biggest and most liquid shares in Kuwait fell as much as 3.2 percent shortly after the opening. It later trimmed the decline to 0.9 percent as of 10:55am local time, with National Bank of Kuwait SAKP falling the most.

The 91-year-old emir, Sheikh Sabah Al-Ahmed Al-Sabah, underwent “successful surgery” on Sunday after being admitted to a hospital, the state news agency KUNA reported. Crown Prince Sheikh Nawaf Al-Ahmed Al-Sabah will temporarily assume some of the emir’s constitutional functions and duties as the country tries to resume economic activity after introducing curbs to prevent the spread of the coronavirus.

In addition, S&P lowered its outlook for the country’s sovereign rating to negative from stable, citing the impact of oil-production cuts amid the pandemic. The ratings company expects the government deficit to widen to almost 40 percent of gross domestic product this year compared with about 10 percent in 2019.

The change in outlook “is an automatic result of low liquidity in state reserves”, Finance Minister Barak Al-Sheetan said in a statement. “The executive and legislative powers are now working on finding solutions for this challenge.”

Middle Eastern Markets:

  • Saudi Arabia’s Tadawul All Share Index rises 0.1 percent, boosted by gains of Saudi British Bank and Jabal Omar
  • Gauges in Egypt and Dubai rise as much as 0.6 percent, while those in Abu Dhabi and Bahrain decline as much as 0.7 percent
  • Credit Suisse sees “some difficulties still ahead for real estate overall” in Dubai, the Head of Middle East Research Fahd Iqbal says in an interview to Bloomberg TV
  • “As far as a sustained recovery is concerned, we really need to see a stabilization in actual population numbers,” as well as “any kind of stabilization we see in the overall sales”

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