JEDDAH — Gulf stock markets plunged to multi-year lows again on Wednesday, with the Saudi market losing 5 percent of its value, in response to a fresh drop in oil prices and global equities.
With valuations and dividend yields now looking attractive by global standards, major regional markets had rebounded on Tuesday. Wednesday's losses erased those gains and underlined the fragility of investor sentiment, amid uncertainty over how Gulf oil exporting economies can cope with an era of cheap oil.
Riyadh's index sank 5.0 percent to 5,460 points, the lowest close since March 2011. It has lost 21 percent so far this year. Petrochemical blue chip Saudi Basic Industries slumped 6.0 percent.
Al Tayyar, a traditional play on rising consumer spending in Saudi Arabia, tumbled 9.0 percent. The tourism and travel group posted a 6.9 percent fall in fourth-quarter profit to 215 million riyals ($57.3 million); analysts at Aljazira Capital and Osool & Bakheet Investment Co had expected 286.3 million riyals and 296.4 million riyals.
Khodari, a construction firm, slumped 9.7 percent after it swung to a fourth-quarter loss as margins and revenue fell and financial charges increased.
All major banks fell more than 2.0 percent. Arab National Bank plunged 8.7 percent after posting a quarterly net profit of 594.4 million riyals, a 5.5 percent fall; analysts polled by Reuters had forecast an average 691.2 million riyals.
In Egypt, the main index slumped 5.3 percent in response to Asian stock markets' decline. Orascom Telecom fell 8.6 percent, wiping out all of Tuesday's 5.5 percent gain, and was the most traded stock.
Foreign investors, who have been exiting positions in Cairo stocks for more than a week, were again net sellers on Wednesday, bourse data showed. Commercial International Bank and Global Telecom , two favourites of foreign funds, each tumbled 8.7 percent.
The Dubai and Abu Dhabi bourses both tumbled to 28-month lows. Dubai plunged 4.6 percent; the two most traded stocks were builders Arabtec and Drake & Scull , declining 7.7 and 7.8 percent respectively. Drake posted a record low close.
Abu Dhabi's bourse slumped 3.1 percent, taking its 2016 losses to 12.5 percent. Small and mid-cap stocks were battered as local investors dumped shares indiscriminately. Dana Gas, the most traded stock, plummeted 9.5 percent.
"The stock markets are fickle and vulnerable to swings in oil prices," said an Abu Dhabi trader. "Tuesday's rebound lost its bounce because we are back to the same macroeconomic worries which have plagued equity markets from the start of the year."
In Qatar, the index was down 3.3 percent after rocketing more than 5.0 percent on Tuesday. Gulf International Services, an oil driller, tumbled 6.8 percent.
Qatar Insurance fell 0.8 percent after reporting a 57.8 percent jump in net profit for the fourth quarter to 350.4 million riyals ($96.2 million); QNB Financial Services had forecast 108.3 million riyals. — Reuters
