Gulf markets fall on global oil output deal

The Tadawul All Share Index (TASI) dropped 1.3 percent to 6,783 points. Daily trading volume was the lowest since September 2015, partly because of the start of Ramadan. (Reuters)

DUBAI: Most Gulf stock markets fell in disappointment on Sunday after global oil producers agreed to extend cuts in output by nine months in an effort to prop up prices.
Last Thursday’s oil output deal may put a floor under oil prices at around $50 a barrel for Brent crude, which could allow Gulf governments to spend a little more on economic growth this year.
“While the cuts will continue to trim headline gross domestic product (GDP) growth in the Gulf this year, the boost to oil export receipts should allow austerity to be eased further, supporting stronger growth in non-oil sectors,” London-based Capital Economics said in a report.
But many in the markets had been hoping for stronger action by producers to push up oil prices, such as an agreement to deepen the production cuts or extend them further until mid-2018. Brent dropped by more than 4 percent to as low as $51.03 late on Thursday, though it then came back to $52.15.
The Tadawul All Share Index (TASI) dropped 1.3 percent to 6,783 points, falling below technical support at 6,826-27 points.
Daily trading volume was the lowest since September 2015, partly because of the start of Ramadan, which traditionally thins market activity.
The market’s decline was broad-based, with 161 stocks falling and just five rising. Petrochemical producer Nama Chemicals plunged its 10 percent daily limit.
In Dubai, the index slipped 1 percent in thin trade to 3,294 points, its lowest level since last November. Amusement park operator DXB Entertainments, in a strong downtrend for the past month because of disappointing attendance at its parks, was the most heavily traded stock and fell a further 2 percent.
Builder Arabtec, which has been languishing near multi-year lows, rebounded 2.5 percent as subscriptions to its planned capital increase ended.
Retail and restaurant investor Marka initially rose but closed 1.2 percent lower after it appointed Benoit Lamonerie, whom it described as a 20-year veteran of retail and hospitality projects, as chief executive. Qatar’s index fell in early trade but closed 0.6 percent higher as Ezdan Holding recovered 0.7 percent. The stock had plunged 10 percent on Thursday after the property firm’s shareholders gave preliminary approval to take it private.
In Egypt, the blue-chip index gained 0.9 percent as two real estate developers surged; Emaar Misr jumped 9.1 percent in unusually active trade while Talaat Mostafa added 2 percent.