Gulf Stocks Extend Drop Shrugging Off New Measures: Inside EM

(Bloomberg) --

Equity markets in the Gulf extended losses on Sunday despite regional governments trying to blunt the impact of the coronavirus with economic stimulus measures.

Abu Dhabi’s main gauge lost the most, while shares in Dubai, Saudi Arabia and Bahrain also fell. The losses came after oil tumbled on Friday on concern that the collapse of global energy demand will deepen.

Over the weekend, Dubai’s ruler, Sheikh Mohammed Bin Rashid Al Maktoum, asked local banks to offer companies relief, including via repayment deferrals. Emirates NBD PJSC, Dubai’s biggest lender, lost as much as 4.9% as trading resumed. In Saudi Arabia, the government announced plans to raise its debt ceiling to borrow more as oil slumps.

Read about measures announced by Saudi Arabia last week to save companies $32 billion.

“For banks, the pain will be felt for much longer. This is the perfect storm for them,” Hedi Ben Mlouka, chief executive officer at FIM Partners in Dubai, said in an interview with Bloomberg TV on Sunday. “The interest-rate environment has gone to zero, so net interest margins will depress further, especially for Saudi banks. And then, the deterioration of asset quality, higher non-performing loans, higher cost of risk, will probably lead to much lower dividend yields going forward.”

• Abu Dhabi’s ADX General Index finishes 3.6% lower
  • First Abu Dhabi Bank -4.4%, Etisalat -4.9% Abu Dhabi Commercial Bank -4.5%
• Dubai’s DFM General Index retreats 2.1%
  • Emirates NBD -4.2%; Emaar Properties -4.5%; Dubai Investments -4.6%
• Saudi Arabia’s Tadawul All Share Index falls 1.5%
  • Saudi Aramco -1.5%; National Commercial Bank -3.1%; Saudi British Bank -2.6%
• Qatar’s QE Index climbs 0.2%, after falling as much as 0.7%
  • Qatar National Bank -1.4%; Masraf Al Rayan -1.2%
• Exchanges in Kuwait and Oman are closed due to local holidays

More Middle East Stories:

• Egyptian Stocks Extend Jump After State-Run Lenders Show Support
• Putin Won’t Bow to What’s Seen as Saudi Oil-Price Blackmail
• Saudi Arabia Suspends Local Flights, Transport for Two Weeks
• Oman to Trim Budget, Draft Public Debt Law Over Virus, Oil Price
• Saudi Arabia Says Virus Steps to Save Companies $32 Billion
• Saudi Banks Are Ranked on Sectors Exposure, Coverage, Liquidity
• More Savings from Efficiency Are Crucial to ANB’s Profitability

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