Saudi Shares Retreat to 3-Month Low on Oil, Europe Debt C
Saudi Arabian shares fell to the lowest in almost three months, led by petrochemical companies and banks, as falling oil prices and concern over Europe’s debt crisis prompted bets that fuel demand may drop.
Saudi Basic Industries Corp. (SABIC), the world’s largest petrochemical maker known as Sabic, fell for a seventh day. Al Rajhi Bank (RJHI), the kingdom’s largest bank by market value, declined to the lowest level since Jan. 30. The Tadawul All Share Index (SASEIDX) dropped 1.9 percent 6,966.37, the lowest since Feb. 20, at the 3:30 p.m. close in Riyadh. The 152-member index is up 8.6 percent this year.
Oil retreated to a six-month low in New York yesterday on concern Greece will have to leave the euro, compounding Europe’s debt crunch and curbing fuel demand. Crude oil for June delivery fell $1.08 to $91.48 a barrel on the New York Mercantile Exchange yesterday, the lowest settlement since Oct. 26. That took the weekly decline to 4.8 percent. Saudi Arabia is the world’s top oil exporter.
“The Saudi market will tumble as a result of weaker crude prices and the deteriorating economic outlook in Europe, which could threaten other regions,” Asim Bukhtiar, head of research at Riyad Capital, said in response to e-mailed questions.
U.S. stocks tumbled for a third week, pushing the Standard & Poor’s 500 Index to its longest losing streak since August, amid concern global economic growth is slowing. German Finance Minister Wolfgang Schaeuble said market turmoil caused by the euro-zone crisis may last two more years.
Sabic fell 1.8 percent to 94 riyals, taking its decline to 6 percent in the last seven trading days. Al Rajhi dropped 3 percent to 71.75 riyals. Etihad Etisalat, the kingdom’s second- largest mobile phone company, retreated 1.1 percent to 65.50 riyals.
Saudi Arabia’s stock exchange is the only Persian Gulf bourse operating on Saturdays.
To contact the reporter on this story: Glen Carey in Riyadh at email@example.com
To contact the editor responsible for this story: Shaji Mathew at firstname.lastname@example.org