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Saudi shares drop most in eight months

DUBAI — Saudi Arabia’s shares slumped the most in almost eight months on investor concern that oil prices may retreat amid signs the global economic recovery is slowing.

Saudi Kayan Petrochemical, the company 35 per cent-owned by Saudi Basic Industries Corporation, lost 6.5 per cent after its first-quarter loss widened. Saudi Arabian Fertiliser, the company known as Safco also part-owned by Saudi Basic, tumbled to the lowest since February. Saudi Arabia’s Tadawul All Share Index fell 2.3 per cent, the most since August 20, to 7,348.33, at the 3.30pm close in Riyadh.

“There is a fear that the global economy is slowing down and with it could take oil prices down too,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. “Saudi Arabia will stand to lose if this happens because it has committed a large budget expenditure, which means that it could have a large but workable budget deficit.”

Saudi companies started reporting first-quarter financial results this month. Saudi Kayan lost the most since January 17, falling to SR17.4 in its 10^th day of declines, the longest stretch of losses on record. The Bloomberg GCC 200 Index decreased 1.2 per cent and the DFM General Index declined 0.2 per cent. Abu Dhabi’s ADX General Index slipped 0.4 per cent and Qatar’s QE Index retreated 0.5 percent. Oman’s benchmark stock index rose 0.4 per cent and Kuwait’s gauge gained 0.5 per cent. Bahrain’s measure advanced 0.2 per cent. —