Gulf Stocks Drop After Skepticism Over Algiers Talks Sinks Crude

  • Stock indexes in Saudi Arabia, Dubai and Abu Dhabi retreat
  • Oil declined the most in more than two months on Friday

Stocks in Dubai and Saudi Arabia led a drop in Gulf equities following a slump in the price of oil stoked by fading prospects for an output deal between major producers.

The DFM General Index and Tadawul All Share Index both declined 0.6 percent on Sunday, with the Saudi gauge posting its fourth loss in five sessions as it reopened following a public holiday. Bloomberg’s GCC 200 Index, a measure of the largest and most liquid companies in the six-nation Gulf Cooperation Council, fell 0.3 percent.

Oil retreated the most in more than two months on Friday after Saudi Arabia was said to dismiss the prospects for an output agreement to stabilize the market in talks in Algiers on Sept. 28. The GCC is home to about 30 percent of the world’s proven crude reserves and governments depend on energy income for the bulk of spending.

“Oil volatility is on the rise, reacting to any headline,” said Hisham Khairy, the Dubai-based head of institutional trading at Mena Corp. Financial Services, one of the biggest brokerages in the United Arab Emirates. “The selloff during the weekend is affecting GCC markets.”

Tadawul Declines

Dubai’s benchmark fell below its 50-day moving average on Sept. 15 and has traded there almost every day since, data compiled by Bloomberg show. Still, the index is the best performer in the GCC this year, climbing 11 percent.

National Central Cooling Co. PJSC lost 3 percent, the measure’s biggest decliner on a percent basis, and Emaar Malls Group PJSC was the biggest contributor to the gauge’s fall, slipping 2.5 percent.

Saudi Basic Industries Corp. and Jabal Omar Development Co. were the biggest contributors to the Tadawul’s retreat, dropping 2 percent and 3.1 percent, respectively. Trading volume on the Saudi gauge was more than 50 percent below its six-month daily average, with about 123 million shares changing hands.

Bahrain’s BB All Share Index and Qatar’s QE Index both gained 0.2 percent, and Oman’s MSM 30 Index added less than 0.1 percent.

Israel Gains

The TA-25 Index rose 0.1 percent. Dual-listed Opko Health Inc. and Perrigo Co. led the advance, tracking gains in their U.S.-traded shares on Thursday and Friday.

The Bank of Israel is expected to leave interest rates unchanged at 0.1 percent at its policy meeting on Monday, according to all 16 analysts in a Bloomberg survey.

Egypt Declines

Egypt’s EGX 30 Index fell 0.1 percent for a third straight drop as trading volumes slumped 70 percent compared with the average of the past six months.

The North African country’s central bank kept interest rates unchanged at its meeting on Thursday, surprising analysts such as Beltone Financial head of research Hany Genena, who had expected a rate increase as a precursor to currency devaluation.

The regulator is likely to float the Egyptian pound before Oct. 7 in order to unlock loans from donors including the International Monetary Fund, which would boost the EGX 30 by as much as 10 percent by November, Genena said.

— With assistance by Sharon Wrobel

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