Global trade war rattles GCC stocks
Now Reading
Global trade war rattles GCC stocks

Global trade war rattles GCC stocks

Tumbling crude oil prices also affected the markets

Avatar

Gulf stock markets tumbled on Monday as a new war of trade between the United States and China drove investors towards safer assets.

Investors are also cashing in their positions ahead of a religious holiday starting from Sunday.

US President Donald Trump last week threatened to impose a 10 per cent tariff on remaining $300bn worth of Chinese imports and China said it would retaliate, adding to the woes of a global economy already showing signs of slowing down.

The move, which could limit crude demand, caused oil prices to fall, handing yet another reason for oil-reliant Middle East markets to worry.

“China’s retaliation by way of halting some US imports and letting the currency weaken against the dollar is impacting markets worldwide. MENA equities
tend to correlate more with Global markets during extreme movements,” said Vrajesh Bhandari, senior portfolio manager at Al Mal Capital.

“For the Middle East, tumbling crude oil prices is yet another negative.”

“Not surprising that traders are taking money off table before going into an extended break for the Eid holidays,” Bhandari added.

The Saudi Arabian index which was also hit by disappointment over some corporate earnings, fell 1.1 per cent with all its banking shares falling.

Banque Saudi Fransi shed 3.6 per cent after posting a 4.4 per cent decline in second-quarter profit, citing higher provision for zakat, an Islamic tax in
Saudi Arabia.

The insurer Walaa Cooperative Insurance slid 6.1 per cent after swinging to a pre-zakat loss in the second quarter. Travel company, Seera Group Holding, which posted a 35.9 per cent slump in profit for the same period, fell 2.7 per cent.

In Dubai, the index fell 2 per cent with property and financial stocks weighing heavily on the index. Dubai Islamic Bank slipped 2.1 per cent and Emaar Properties, dropped 3.3 per cent.

Emaar Properties reported a 7.4 per cent decrease in second-quarter profit to Dhs1.37bn ($373m), missing an EFG Hermes forecast of Dhs1.55bn.

Dubai prime residential property prices fell 1.9 per cent in the first half of the year due to the market being oversupplied, Reuters reported on Monday citing real estate company Savills.

The Middle East financial hub’s real estate market has steadily contracted since mid-2014 as foreign investor interest cooled.

In Abu Dhabi, the index was down 1.9 per cent. Market heavyweight lender First Abu Dhabi Bank dropped 2.2 per cent, while Emirates Telecommunications
Group lost 2.6 per cent.


© 2021 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top