Saudi’s Tadawul hit by strong US dollar

Shares in Saudi Arabia closed lower today, despite reports that the government is moving to settle dues with major contractors.

Reports in the Saudi press yesterday said that the government had paid 40 billion Saudi riyals (Dh39.17bn) to private contractors over the past two weeks and expected to pay another 100 billion riyals by the end of the year.

The report proved of little comfort to investors. The Tadawul closed 0.9 per cent down, dragged lower by Saudi Telecom and Jabal Omar Development. “Contractor payments have already been priced in given the rally over the past few weeks,” said Nayal Khan, the head of institutional equites sales trading at Saudi Fransi Capital in Riyadh.

“Today’s weakness is largely a reflection of global markets over our weekend, plus a strengthening US dollar and its negative impact on emerging markets.”

The Abu Dhabi Securities Exchange General Index fell by 1.7 per cent to 4,221.01, after the capital’s banks downplayed talks of further consolidation within the sector. Etisalat, the index’s heaviest weighted stock, also weakened, closing 2.2 per cent lower at Dh17.55.

Eshraq Properties once again dominated trading, accounting for more than 80 per cent of the day’s trading volume. The developer’s shares closed at a new two-year high of Dh1.14.

Shares in Dubai opened in positive territory but drifted lower throughout the day, closing down 0.3 per cent at 3,301.66, with gains by Damac Properties and Shuaa Capital offset by losses in DXB Entertainments and du.

Drake & Scull International accounted for over half the volumes in Dubai, with the contractor’s shares closing 2.3 per cent higher at 53 fils.

Follow The National's Business section on Twitter