Mideast Stocks: Most Gulf markets turn south as Credit Suisse woes roil markets
Most stock markets in the Gulf gave up early gains to end lower on Wednesday, tracking a decline in global shares, as renewed unease gripped markets after Credit Suisse's largest investor said it could not provide the Swiss bank with more financial assistance.
Saudi National Bank — the kingdom's biggest lender — acquired a stake of almost 10% last year after taking part in Credit Suisse's capital raising and committed to investing up to 1.5 billion Swiss francs ($1.63 billion).
Banking shares, which have been battered following the collapse of Silicon Valley Bank, resumed their sell-off as the Credit Suisse stock lost almost a quarter of its value, dropping to record lows. Shares of Saudi National Bank retreated 2.7%, hitting their lowest since February 2021. The lender lost almost $25 billion in market value since Oct. 27 after committing to invest in the embattled Credit Suisse.
Saudi Arabia's benchmark index declined 1.6%, dragged down by a 2.9% slide in oil giant Saudi Aramco as the stock went ex-dividend, while Retal Urban Development Co fell 1.2%.
In Qatar, the index concluded 1% lower, as most of its constituents were in the negative territory, including Qatar International Islamic Bank, which was down 5.8%.
The Abu Dhabi index fell 0.7%. Oil — a key catalyst for the Gulf's financial markets —extended losses, with Brent crude hitting a three-month low as unease over Credit Suisse spooked world markets, offsetting hopes of a Chinese oil demand recovery.
Dubai's main share index, which advanced more than 1% in early trade, finished 0.2% higher, ending its six sessions of losses.
A shift in global sentiment after the fears that emerged from the fall of U.S. banks could lead the Dubai market into a recovery phase as investors return to the market, said Ahmed Negm, head of market research MENA at XS.com.
"At the same time, traders will remain attentive to the developments in global markets and central bank decisions this week and the next."
Outside the Gulf, Egypt's blue-chip index plunged 4.2%, with investment bank EFG Hermes diving more than 12%.
Saudi Arabia Thinks Oil Price Will Soon Barely Matter to Economy - Bloomberg
Saudi Arabia believes its economy can decouple so much from oil that crude prices soon won’t be a decisive factor in shaping fiscal policy.
“Our aim is within the period to 2030 we don’t even look at the oil price,” Saudi Finance Minister Mohammed Al-Jadaan said Wednesday at the Financial Sector Conference in Riyadh.
For now, the country is far from achieving that goal as oil still provides the bulk of government revenue and largely dictates the performance of the economy.
But since the kingdom unveiled its blueprint for diversifying the economy, called “Vision 2030,” non-oil revenue went from covering about 10% of budget spending to more than a third, according to Al-Jadaan. That “means our dependence on oil revenues becomes much less and with time it will be a lot less,” he said.
UAE Royal's G42 Buys Into ByteDance at $220 Billion Value - Bloomberg
ByteDance Ltd. was valued at around $220 billion in a recent private-market investment by Abu Dhabi AI firm G42, a significant discount to the $300 billion that TikTok’s owner set during a recent share buyback program.
G42, controlled by United Arab Emirates royal Sheikh Tahnoon bin Zayed Al Nahyan, acquired a $100 million-plus stake from existing investors in recent months through its 42XFund, people with knowledge of the deal said. Another fund bought into ByteDance at a $225 billion shortly after, one of the people said, asking not to be identified describing non-public information.
The Chinese internet firm’s gyrating price tag reflects the uncertainty that’s set in since Washington signaled it may be open to outlawing viral video phenom TikTok, which lawmakers have accused of being a national security threat. TikTok’s leadership is discussing the possibility of separating from its Chinese parent to help address those concerns, though that’s a last resort.
ByteDance’s valuation in the G42 transaction doesn’t yet reflect potential after-effects of the Silicon Valley Bank implosion, which stunned startups from the US to China and has raised concerns about broader systemic risks. It remains well off a peak of around $460 billion in 2021 when Tiger Global Management bought shares.
Credit Suisse shares fall to record low as top investor rules out more funding | Credit Suisse | The Guardian
Credit Suisse shares have plunged more than 20% to record lows after its largest shareholder, Saudi National Bank (SNB), said it would not be able to stump up more cash for the beleaguered Swiss bank because of regulatory restrictions.
SNB’s chair, Ammar al-Khudairy, said he would not be able to spend any more money to support Credit Suisse, since the Middle Eastern lender had already accumulated a 9.9% stake. “Well, we can’t … We cannot because we would go above 10%,” he told Reuters in an interview.
However, Khudairy said he did not believe Credit Suisse would need a fresh capital injection. “I don’t think they will need extra money; if you look at their ratios, they’re fine. And they operate under a strong regulatory regime in Switzerland and in other countries,” he said on the sidelines of a conference in Riyadh.
However, the prospect of limits on cash from white knight investors from the Middle East still spooked markets, sending Credit Suisse shares down more than 15% to a record low of 1.73 Swiss francs a share, before trading was halted. Investors also sold European banking stocks, which have already been battered this week after Silicon Valley Bank’s collapse.
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