Saudi Shares Fall Most in Four Weeks on Dubai Debt Concerns


06/12/2009 00:00 AST  Bloomberg

Saudi Arabian stocks fell the most in almost four weeks, led by Al Rajhi Bank and Samba Financial Group, on the first day of trading since Dubai World, a state- owned company in the neighboring United Arab Emirates, said it may delay debt payments.

Al Rajhi, the kingdom’s biggest bank, dropped 2.6 percent, its biggest decline since Aug. 26, to 75.25 riyals. Samba, the second biggest, fell 3.2 percent, the most since Oct. 27, to 53.25 riyals.

Saudi Arabian banks made “limited” loans to Dubai World, which announced its debt payment decision on Nov. 25, central bank Governor Muhammad al-Jasser said in an interview with Al- Arabiya television yesterday. The holding company, which has $59 billion of liabilities, is restructuring $26 billion in debt.

“It didn’t fall nearly as much as I thought” it would, Paul Gamble, an economist at Jadwa Investment, said in a telephone interview. “The market took confidence from what al- Jasser said about how much Saudi banks were exposed to Dubai World.”

The Tadawul All Share Index declined 1.1 percent to close at 6,288.27 in Riyadh, the biggest drop since Nov. 8. The index has gained 31 percent this year after losing more than half its value in 2008 as oil prices dropped. The Saudi market opened today after being shut since Nov. 25 for a religious holiday.

Dubai shares tumbled and Abu Dhabi’s stock index dropped the most in at least eight years on Nov. 30, the first trading day for those two markets after the Dubai World announcement.

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