Saudi Arabia's Tadawul All Share Index ended flat Saturday, dipping 0.13 per cent despite a fall in the price of oil to below US$70
Tadawul defies global markets drop
Saudi Arabia's Tadawul All Share Index ended flat Saturday, dipping 0.13 per cent despite a fall in the price of oil to below US$70 and other international markets ending down on Friday. Analysts believe other regional markets will also decline this week when they reopen today as investors react to decreases in global exchanges, the oil price and begin to pull out of securities before Ramadan begins.
"Other GCC stock markets may see some declines at the beginning of the week due to the decline in international markets and also due to profit-taking before Ramadan," said Udo Schaeberle, the head of Gulf clients at the German wealth management company BHF Bank. Ramadan is characterised by low trading volume and therefore little appreciation in prices. A report on Friday that US consumers confidence had unexpectedly declined led to decreases in all major global indexes. The report also contributed to a drop of almost $3 in oil prices to $67.51 per barrel.
The Tadawul ended the day at 5838.27, down from Wednesday's close of 5845.68. The Tadawul index is the only major market open on Saturdays. Banks were the leading contributor to Tadawul's losses, followed by property and industries indexes. Makkah Construction, which develops facilities for pilgrims in Mecca, dropped more than 5 per cent to 31.5 riyals. In other news, MSCI will drop Saudi securities from its GCC Countries indices and Arabic Markets Indices on August 28 because of the company's objection to a provision in Tadawul's Index Creation Agreement that would give the exchange the right to prohibit MSCI from licensing certain indices to third parties.
Tadawul required MSCI to agree to the provisions by August 24 but the company said giving Tadawul "a veto right" over its licensing would make it unable to "continue calculating certain of its indices". * with Zawya Dow Jones email@example.com