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INVESTORS FEAR DEEP SPENDING CUT

UAE, Qatar markets tumble after big oil drop

DOHA, December 14, 2014

Stock markets in the UAE and Qatar fell sharply in early trade on Sunday after the price of oil hit a new low on Friday.

The Dubai benchmark tumbled 6.5 per cent to 3,362 points, erasing all its year-to-date gains. Developer Emaar Properties was down 7.8 per cent and builder Arabtec Holding lost 8.4 per cent.

The main index in Abu Dhabi dropped 3.1 per cent, also destroying all gains made earlier this year.

Qatar's bourse tumbled 6.4 per cent to 11,056 points, a 10-month low.

"It's sentiment over fundamentals," said Sanyalak Manibhandu, manager of research at NBAD Securities in Abu Dhabi. "People are just doing more of what they have been doing for the last few weeks."

Kuwait slid 1.9 per cent and Oman edged down 0.5 per cent. Shares in telecommunications firm Viva Kuwait , which listed on Sunday, more than six years after its initial public offer, tumbled 7.1 per cent from their opening price.

Brent crude dropped nearly 3 per cent and settled at below $62 a barrel on Friday after the International Energy Agency cut its outlook for demand growth in 2015.

A plunge in the Gulf equity markets triggered by oil's decline has wiped out roughly $150 billion of value since the end of October and selling may continue as few people are willing to call a bottom for the markets just yet.

Investors' main concern is that governments in the region may start to cut spending in line with falling oil export revenues.

Many analysts believe that most governments will comfortably be able to maintain spending, but Oman and Bahrain will be under pressure because of their lower fiscal reserves and higher fiscal break-even prices.-Reuters




Tags: Qatar | UAE | stocks | Oil |

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