Riyad June 19 2022: Saudi Arabia’s benchmark stock index headed for the longest losing streak since 2020, following a global sell-off in equities last week and after oil fell the most in three months on Friday. Stocks in Qatar and Kuwait also declined.
Gulf equities are selling off due to the impact of higher interest rates could have on the demand of commodities, said Jassim Al-Jubran, head of sell-side research at Riyadh-based Aljazira Capital. “The current hit is driven by panic and partially by margin calls.”
However, Al-Jubran said he doesn’t “expect the current declines in the Saudi market to sustain for long time as we start to see a good potential in some sectors with the current decline.”
- Tadawul All Share Index dropped as much as 3.8% to the lowest since January; the benchmark has retreated for the past six days
- All 14 sectors traded lower, while over 200 out of 211 stocks on the benchmark fell
- Aramco contributed the most to the index decline, decreasing 3.1%
- West Texas Intermediate on Friday dropped to $109.56, shedding 6.8%, the biggest daily drop since March as US Fed Chair Jerome Powell doubled down on his determination to curb the hottest inflation in decades with more aggressive rate hikes
- Fears that rising interest rates and a slowdown in economic growth will lead to demand destruction have gripped the market but in the long run, supplies still look tight, market participants said
- State-owned Aramco is still the world’s biggest listed entity with a market value of $2.18 trillion compared with $2.13 trillion for Apple
Source:
Bloomberg
