Shares in Saudi Arabia fell the most in nearly two months following disappointing earnings by some of the kingdom’s largest companies, prompting similar declines across the region.
The Tadawul All Share Index closed down 2.7 per cent at 7,479.01, making it the poorest performing global equity index of the day after China’s Shanghai Composite.
Saudi Telecom plunged 6.5 per cent after the company announced a 31 per cent decline in profit for the third quarter.
The blue-chip Saudi Basic Industries (Sabic) dropped 3.5 per cent.
“Emaar Economic City and STC’s interim earnings have definitely negatively affected investor assumptions, even though in many cases a drop in quarterly results was expected,” said Tariq Qaqish, the head of asset management at Al Mal Capital in Dubai.
“It’s only once the more detailed numbers come out that we’ll be able to judge whether these are one-time losses and companies are still on track, or whether they will be recurring.”
Negative sentiment from Saudi Arabia proved contagious across the Arabian Gulf region.
Dubai and Abu Dhabi closed down 1.5 per cent and 1.1 per cent, respectively, their sharpest one-day declines in about five weeks.
Emaar Properties finished off 2.9 per cent at Dh6.66 in Dubai, while FGB closed down 1.8 per cent at Dh13.65.
“Saudi did contribute to local declines, but overall sentiment around the region is still weak,” said Mr Qaqish.
“Trading volumes are really low, with investors sitting on the side waiting for things to cool down and for markets to regain a catalyst that will tempt them back in.”
jeverington@thenational.ae
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