简体中文
Stock indices from Kuwait to Oman retreated on Wednesday following a gloomy outlook for the Eurozone and new political stalemate in the United States following Congressional mid-term elections.
The Dubai financial market general index lost the most in the region, ending down 3.26 percent at 4,400.80 points, a three-week low. In Riyadh, the Saudi Tadawul All-Share index fell by 1.60 percent to close at 9,628.84 points.
Investors reacted to the announcement made by the Euro commission late Tuesday that it slashed the economic growth forecast for the 18-member state Eurozone to below 0.8 percent from 1.2 percent in 2014.
In addition, the victory of the oppositional Republican Party in the United States in the mid-term elections to congress on Tuesday signaled a new political stalemate in the world's biggest economy.
Despite ongoing turmoil in the region like in Iraq, Syria, Lebanon, Yemen and Libya, oil prices declined further as a reaction to news from the West on Wednesday, jeopardizing state revenues in the six Arab GCC (Gulf Cooperation Council) countries around Saudi Arabia which are mostly major oil suppliers. The barrel "black gold" (Unites States crude) lost 0.20 percent to hit 77.04 dollars per barrel, representing the lowest level since October 2011.
Consequently, the shares of Saudi Basic Industries Corporation or SABIC dived 2.80 percent to 102.75 Saudi riyal (27.75 dollars), representing a one-year low.
SABIC is the biggest producer of petrochemicals and also regional market indicator. In addition to news from the West, Saudi Arabia announced on Tuesday it slashed the selling price of crude oil exports to the United States.
In Doha, the Qatar Exchange index ended off two percent. The Kuwait market index KSEMI fell by 1.39 per cent, while the gauge in Abu Dhabi dived 2.41 percent. Abu Dhabi, the capital emirate of the United Arab Emirates, harbors approximately seven percent of the world's known oil reserves. In Muscat, the Muscat securities market saw its lead index falling by 1.30 percent.
Nevertheless, Arjuna Mahendran, the chief investment officer wealth management at bank Emirates NBD in Dubai sees light at the end of the tunnel. "The oil sector seems to be oversold both globally and regionally," he said, "as crude oil continues to move upwards and stability returns, it should be a viable short term trade to buy into some of the higher yielding stocks or into global oil equity indices for a December recovery."
Qatar, Mahendran thinks, shall be better off than its GCC peers. "Qatar is less dependent on oil prices, with a lower break-even price of oil for its budget at 65 dollar per barrel," said the expert.
