Business | Markets

Banks lead losers on Saudi stock market

Banks led losers as the Saudi stock market closed down for a fourth consecutive session as investors awaited fourth-quarter earnings amid a negative economic outlook for 2009.

  • Reuters
  • Published: 23:32 December 27, 2008
  • Gulf News

Dubai: Banks led losers as the Saudi stock market closed down for a fourth consecutive session as investors awaited fourth-quarter earnings amid a negative economic outlook for 2009.

The index closed 2.68 per cent lower at 4,543.89.

Albilad shed 7.9 per cent, Banque Saudi Fransi ended 7.8 per cent lower and Saudi Hollandi fell 7.7 per cent.

Analysts are concerned over the impact the global crisis may have on the domestic financial system which is also expected to face tighter credit conditions in 2009.

With oil prices expected to be below the records of this year, the Saudi economy is bound to face a slowdown in 2009, says John Sfakianakis, chief econ-omist at HSBC's Saudi subsidiary, SABB bank.

"Consumer spending should slow down as pessimism unfolds ... even if interest rates are fast falling," he writes in a note.

Domestic banks do not have the capacity to withstand the financing needed for the $400 billion projects earmarked over the next four years because they are struggling to secure long-term deposits, he says.

"We believe that the private sector will undergo [in 2009] one of its toughest years in its recent past," Sfakianakis adds.

Property developer Emaar Economic City topped traded stocks as investors react to news the firm will start in the first quarter delivering the first housing and business units at its main project King Abdullah Economic City.

The stock closed 4.05 per cent up at nine riyals, which is below both its listing price and the nominal value of the share.

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