GCC stocks slump after VAT hike in Saudi Arabia, record new Covid-19 cases

Dubai - Dubai Financial Market general index lost 2.5 per cent, while the Abu Dhabi bourse was down 1.2 per cent.

The UAE and other Gulf countries' stock markets slumped on Monday morning, hit by Saudi Arabia's decision to increase value-added tax (VAT) and suspending cost of living allowance, as well as a jump in coronavirus cases reported in the UAE and Kuwait on Sunday.

The decline in the regional bourses was led by Saudi Arabia as Tadawul lost 3.3 per cent within a few minutes of opening the trade. In a surprise move, Riyadh on Monday announced suspending the cost of living allowance and raising VAT threefold to shore up state finances, which have been battered by low oil prices and the coronavirus.

Dubai Financial Market General Index also lost 2.5 per cent to 1,854 points, dragged down by Dubai Islamic Bank, Emaar Properties, Emaar Malls, Deyaar and Amanat Holding scrips.

Abu Dhabi bourse sank 1.2 per cent due to losses in shares of Waha Capital, Abu Dhabi Ship Building, Eshraq, Dana Gas and RAK Ceramics.

The UAE and Kuwait on Sunday announced 781 and 1,065 new cases of coronavirus, respectively. These were the highest daily new cases reported by the countries since the outbreak of the pandemic.

Boursa Kuwait slumped over one per cent to 5,117 points while Bahrain Bourse dropped 0.1 per cent to 1,268. Qatar bourse also dipped in line with the trend witnessed in other bourses.

Oman's Muscat Securities Market bucked the trend, inching up 0.12 per cent to 3,473 points.

waheedabbas@khaleejtimes.com