Dubai: Stock on the Middle East markets extended their decrease yesterday on fears political unrest in the region could harm the economy.
Qatar's index tumbled to a three-week low, extending declines as investors price in heightened risk for Middle East stocks. Qatar National Bank was down 3.9 per cent while Qatar Telecom slumped 2.4 per cent and Industries Qatar lost 3.4 per cent. The index dropped 2.6 per cent to 8,476 points, falling to its lowest level since January 30 as 19 of the benchmark's 20 stocks fall.
Risk premium
"As buy side and sell side try to determine fair value for stocks, the cost of capital has a risk premium embedded into it," said Hashem Montasser, managing partner at Frontlane Capital, a Dubai-based asset management firm. "It's too early to say whether there will be a long-term price adjustment in Middle East equities. Risk premiums will be elevated for at least the next couple of months."
In Saudi Arabia, Kingdom Holding declined for a second day as its bid for a stake in telecoms operator Zain Saudi failed, but Saudi Arabia's index eased away from Saturday's three-week low. Kingdom dropped 2.2 per cent, adding to a 9.8 per cent loss a day earlier.
Zain has rejected all three offers for its stake in Saudi affiliate Zain Saudi.
Bahrain Telecommunications Co (Batelco), which was untraded, and Al Riyadh Group were the other bidders. Zain Saudi fell 1.3 per cent.
"Given Zain Saudi's balance sheet, it isn't a great company in terms of valuations and Zain's management probably wanted more than was offered by bidders," said a regional telecoms analyst who asked not to be identified.
Saudi Arabia's index climbed 0.4 per cent to 6,412 points, reversing initial losses. Samba Financial Group rose 1.4 per cent and SABB added 1.3 per cent.
