DUBAI/RIYADH: Saudi stocks fell sharply on Sunday, after attacks on two plants at the heart of the kingdom’s oil industry a day earlier knocked out more than half of Saudi crude output. Sunday’s decline extended a losing spree for Saudi stocks, which in recent weeks have been hit by expensive valuations, weak oil prices and concerns about the economic outlook. The drone attacks were carried out by Yemen’s Houthi group, its military spokesman said on Al Masirah TV. The index opened down 2.3 per cent but later pared some losses.
At 0914 GMT, the Saudi market was down 1.3 per cent. The index has lost all its gains this year and is down about 18 per cent from its 2019 high of 9,403 points seen in early May. The index’s earlier gains were fuelled by Saudi Arabia’s entry into the MSCI and FTSE Russell’s emerging market indices, but analysts said that effect had faded in recent weeks. Saudi Basic Industries (SABIC), the kingdom’s biggest petrochemicals firm, was down 2.4 per cent after it said it had curtailed feedback supplies by about 49 per cent following the attacks. Aramco has agreed to buy a 70 per cent stake in SABIC from the state Public Investment Fund in a $69.1 billion deal that is awaiting regulatory approvals.
Other petrochemical companies such as Yanbu National Petrochemicals Co and Kayan also announced significant reductions in feedstock supplies. “The stock market has been affected, especially the petchem sector, (as) the efficiency of some major companies will be about 50 per cent in the coming 10 days,” said Mazen al Sudairi, head of research at Al Rajhi Capital. Other Gulf markets also reacted negatively to the attacks, with Kuwait’s premier index down 0.4 per cent and Dubai stocks falling 0.5 per cent, although they recovered from sharper intra-day losses. — Reuters