Middle East stocks took their cue from last week’s global sell-off as the emergence of a worrying new coronavirus variant reverberated through markets, sending every major index into retreat.
Dubai’s benchmark gauge dropped the most, tumbling 5.2% as of 3:40 p.m. local time, its sharpest loss since March 2020. Saudi Arabia’s main index fell 4.2%, the most since October 2020. There were declines in Israel, Egypt, Jordan, Kuwait, Qatar and Abu Dhabi.
Coming in the wake of Friday’s worldwide slump, the declines across the energy-rich markets of the Gulf threatened to undo some of the gains made this year amid a flurry of initial public offerings and a rally in oil prices. Brent, the benchmark grade for more than half the world’s oil, lost almost 12% Friday on concern the new Omicron Covid-19 variant will usher in fresh lockdowns and crimp air travel.
“We are going to mimic the sell-off we have seen in the global markets today. I don’t think it’s a surprise,” Ahmed Badr, head of the Middle East and North Africa at Credit Suisse AG in Dubai, said in a Bloomberg TV interview before markets began trading Sunday. “The question is how long” it will last and “what kind of opportunities it’s going to present in terms of buying opportunities,” he said.
As governments around the world announced measures to limit the variant’s spread, Israel on Saturday banned foreigners from entering the country for two weeks, while Saudi Arabia and the UAE suspended flights to and from South Africa -- where omicron was first identified -- as well as some other nations on the African continent.
The emergence of the omicron variant added a fresh ingredient to what was already stacking up to be a critical week for investors, with U.S. jobs data scheduled for release on Friday and the OPEC+ oil-producer group due to decide Thursday whether to enact a planned 400,000 barrel-a-day increase in output.
Mike Muller, the head of the Asia unit at Vitol, the world’s biggest independent oil trader, said Sunday he expects OPEC+ to take a cautious stance when it meets, amid signs that demand may be weakening in some markets going in to the winter months in Asia and Europe.
Dubai-listed Shuaa Capital PSC and Amlak Finance were the biggest losers in the Middle East region Sunday, slumping 10% each. In Saudi Arabia, Nama Chemicals Co. dropped the most, retreating 8.5%.
- Dubai’s DFM index down 5.2%, with all every stock in decline
- Real estate and construction stocks led the losses
- Emaar Properties PJSC contributed the most to the index retreat, decreasing 8.2%; SHUAA Capital PSC had the largest drop, falling 10%
- The move was the biggest since it fell 6.1% in March 2020
- Saudi Arabia’s Tadawul All Share Index lost 3.9%
- All sectors in the red, with the Consumer Durables and Apparel Index leading losses with a 5.7% slide
- Arabia Insurance Cooperative was down 7%; Takween Advanced Industries fell 7%
- The index slipped 7.2% this month. It’s still up 25% in 2021, heading for the best year since 2013
- Abu Dhabi’s ADX General Index fell 2.3%
- First Abu Dhabi Bank PJSC contributed most to the decline, down 3.6%
- Israel’s TA-35 was down 3%
- Bank Leumi Le-Israel BM contributed the most to the loss, sliding 3.6%
- All 35 shares fell
- The index is up 22% in 2021, heading for the best year in at least a decade
- The Qatar QE fell 2.8%, its biggest drop since April 2020
- Industries Qatar QSC lost 4.3% while Investment Holding Group dropped 4.9%
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