Saudi stocks drag lower before Ramadan

24/05/2017 05:31 AST

The Tadawul All Share Index (TASI) pulled back 0.7 percent as 147 shares declined and only 11 rose in modest volumes.

“This is the cash-out before Ramadan and it is not uncommon to see some unwinding ahead of the quieter period,” said a Jeddah-based trader. Ramadan is expected to start this Saturday. In other Gulf markets, Dubai’s index dropped 0.8 percent with the only listed exchange in the Gulf, Dubai Financial Market (DFM) retreating 3.6 percent.

In recent months Dubai’s stock market has been underperforming its regional peers and trading volumes have shrunk. Traders may have decided to cash out of DFM’s shares as they expect its top line in the second quarter to come under pressure, especially since it coincides with Ramadan.

DXB Entertainments lost 2.2 percent, as Ramadan and hot summer weather may reduce footfall at its Dubai hotels and theme parks.

In Abu Dhabi, mid-to small-sized companies weighed on the index, which fell 0.1 percent; food producer Agthia Group was down 1.8 percent.

In Qatar, banking shares which are constituents of the MSCI emerging market index were resilient with Qatar National Bank rising 1.2 percent and Masraf Al-Rayan adding 0.2 percent. The index, however, dropped 0.1 percent as most other shares declined.

Meanwhile, Egypt’s stock market recovered some of the previous day’s heavy losses. Cairo’s index rebounded 1.1 percent after tumbling 2.5 percent on Monday, its largest single-day decline since Jan. 19 after the central bank unexpectedly raised interest rates by 2 percentage points to fight sky-high inflation.

The surprise move prompted heavy selling by local retail investors but several foreign fund managers said they did not expect a lasting impact on the market, partly because of the loose links between interest rates and the real economy in Egypt.

Arab News