Saudi Gazette report

RIYADH — The Saudi stock market lost more than half a trillion riyals in market value during trading on Sunday amid the losses of other Gulf states following the outbreak of a trade war caused by imposition of tariffs by US and China's retaliatory tariffs. The plunge in the Gulf market also coincides with the drop in oil prices and global stock exchanges over the weekend.

Saudi Arabia’s benchmark Tadawul All Share Index (TASI) plunged more than 700 points (6.1 percent) to below 11,200 points. Saudi Aramco shares accounted for the largest portion of the losses, with its market value fell by more than SR340 billion. Gulf stock indices also saw a collective decline with Qatar, Kuwait, Muscat and Bahrain posting falls on Sunday.

This followed the announcement by US President Donald Trump of a 10 percent reciprocal tariff on Gulf imports. The US tariff, which came into effect on April 5, was imposed to address what Trump described as 'long-standing unfair trade practices.'

Thirty-four companies listed on the Saudi stock exchanges, the TASI and Nomu, recorded historic lows from the start of trading on Sunday until midday, affected by the trade war and the drop in oil prices to their lowest levels in four years.

According to a report in Al-Eqtisadiah business daily, TASI fell 6.1 percent at the beginning of Sunday's trading session, marking the largest decline since May 2020, following the collapse in global markets since the US Independence Day, when Trump announced tariffs on his trading partners.

Saudi companies that recorded their lowest prices on record included Takween, Al Amar, Arabian Drilling, Gulf General, Saif Gallery, First Mills, Fourth Mills, Arabian Mills, Al Nahdi, Entaj, Addis, Americana, Talco, Dar Al-Ma'dat, Derayah, Raydan, Samasco, Fakieh Health, Lumi, Nice One, Naqi, and Herfy Foods.

The Nomu Parallel Market Index also recorded a fall of 5 percent by midday, losing 1,600 sessions, marking its second decline after five consecutive sessions of gains. The Nomu saw shares of 13 companies fall to their lowest prices on record, including Taqat, Obeikan Glass, Arabica Star, Jana, Amwaj International, Taiba, Manawala, Ratio, Al Batal Factory, Lamasat, Sultan Food, Shamou Al Madi, and Hadab Al Khaleej.

Aramco shares led the market's decline, falling 6.2 percent and it was followed by Al Rajhi Bank, ACWA Power, and Saudi National Bank, with declines ranging between 5 and 6 percent. Half an hour after the start of trading, trading volume reached approximately SR2.2 billion, with a trading volume of 130 million shares. This liquidity was concentrated in Al Rajhi, Aramco, and STC shares.

Gulf stock indices, as well as the Egyptian and Jordanian stock exchanges, began the week with collective losses. The Kuwait Stock Exchange recorded a decline of 6.6 percent, and the Qatar Stock Exchange index fell by 5.5 percent, the largest declines since March 2020.

The Muscat Securities Market index fell by 2.1 percent, while the Bahrain Stock Exchange index fell by approximately 2.5 percent. It is worth noting that stock markets in the UAE have not yet begun trading for the week as Sunday is a holiday and will resume trading Monday.

In Egypt, the main index EGX 30 fell by approximately 3.6 percent during Sunday's trading. Trading on 11 stocks on the Egyptian Exchange was suspended for 10 minutes after they fell by more than 5 percent. The Jordanian Stock Exchange declined by approximately 2 percent, with the shares of 60 companies declining and only eight companies rising, while the shares of 18 companies remained stable.

Worst trading since the pandemic

Globally, investors are preparing for a bleak day after markets return from the weekend on Monday, amid concerns about retaliation against US tariffs. Wall Street suffered heavy losses following the announcement of US tariffs, marking one of the worst days for stocks since the peak of the sell-off during the coronavirus pandemic. Nearly $2 trillion was wiped off the value of the S&P 500, which fell by about 5 percent.

Trump announced a minimum tariff of 10 percent on all countries exporting to the United States, including the Gulf states, while additional tariffs of between 30 percent and 41 percent were imposed on six major countries, including China, Japan, and European countries.

These tariffs have raised market concerns about the future of the global trading system. Observers believe that the potential impact of Trump's trade policies will not be limited to the imposition of tariffs, but may extend to include disruptions to global supply chains and increased prices for raw materials.

Countries are considering how to respond to Trump's latest tariffs, which raised US tariffs to their highest level in more than a century and dealt a blow to the global trading system established after World War II, and that Trump considers unfair.

Adding to the challenge facing foreign leaders and businesspeople are Trump's conflicting signals about his willingness to negotiate to reduce the size and scope of his tariffs. Last Thursday, Trump indicated his willingness to reduce his tariffs if other countries made a "special" offer.