Arabian Gulf shares retreat anew as investors stay on the sidelines

Passive funds will flow into 22 shares as of Tuesday, and the stocks will continue to be bid up for several days to come as managers meet their fund mandates.

Shares across the Arabian Gulf fell for a third consecutive day on Tuesday as investors weighed up the impact of further economic tightening across the region.

“Volatility in local markets will increase as we move towards the end of the year, as markets increasingly get the picture that not all is rosy in the wider regional economy,” said an independent market expert who did not wish to be named.

“I wouldn’t call it a panic, but investors are likely to sit on the sidelines more, thanks to worries about further budget cuts and rising non-performing loans.”

The losing trend in Saudi equities persisted this week. The Tadawul index ended 0.1 per cent lower at 5,925.14, as oil prices drifted towards seven-week lows.

Brent crude futures traded around 1 per cent lower on Tuesday afternoon, on the prospect of higher Nigerian production and rising US stockpiles.

Dubai shares were the worst performers in the region, owing to falls from Mashreq and Damac Properties. The DFM General Index closed down 0.8 per cent at 3,455.18, its lowest close since early August. Air Arabia and Emaar Malls were the pick of a handful of gainers, rising by 0.7 per cent and 0.2 per cent.

Abu Dhabi shares meanwhile fell 0.4 per cent to 4,463.86, dragged lower by FGB and UNB.

Qatar shares recovered on Tuesday after plunging 4 per cent on Monday, ending the day up 1 per cent.

The shares fell on Monday as investors cashed in ahead of the inclusion of 22 companies listed on the Doha bourse in the FTSE Russell Secondary Emerging Market Index from on Tuesday.

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