Saudi Arabia’s cost-cutting steps set austere tone in Gulf markets
Saudi shares had their worst day in more than four months on Tuesday, after the kingdom announced unprecedented cuts to state salaries, dragging equities lower across the Arabian Gulf.
Stocks were sent reeling following the government’s decision to cut ministers’ salaries by up to 20 per cent and cancel bonus payment for all state employees, amid concerns about the impact of the move on consumer spending.
The Tadawul finished the day down 3.7 per cent at 5,730.69, without a single stock ending in positive territory. The index, which closed at its lowest level since mid-February, was the second worst performing stock market in the world on Tuesday.
The pessimism spilled over into the wider Arabian Gulf region, compounded by the fading prospect of a new oil production deal between producer nations at the ongoing informal meeting in Algeria.
Brent crude futures traded around US$46.44 per barrel lower on Tuesday late afternoon, after Iran’s oil minister Bijan Namdar Zanganeh said the country was not ready to freeze production.
The Dubai Financial Market fell 0.7 per cent to close at 3,466.56, dragged lower by Emaar Properties. The developer’s shares fell 0.8 per cent to Dh7.07, while Emaar Malls closed 1.8 per cent lower. Cooling firm Tabreed was the pick of just four gainers, rising 4.2 per cent to Dh1.73.
Shares in Abu Dhabi closed down 0.4 per cent at 4,471.68, with five of the index’s six biggest names ending lower. FGB led losses, closing 1.2 per cent lower, while RAKBank was one of the index’s largest gainers, rising 3.8 per cent.
The Qatar Exchange broke a three-day positive streak, closing off 0.3 per cent.
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Published: September 27, 2016 04:00 AM