Gulf, Egyptian and Gulf markets are losing $ 130 billion as oil prices fall
Saudi Arabia's stock market led declines on most of the Gulf bourses on Sunday after oil prices fell about 8 percent at the end of last week, while concerns about new results to regulate the work of banks from the Egyptian stock exchange.
London's Capital Economics estimated last week that a drop in the price of Brent crude from $ 85 a barrel in early October to less than $ 65 wiped out $ 130 billion in Gulf oil revenues on an annualized basis, equivalent to 9 percent of output Gross Domestic Product.
The financial reforms of the last few years will allow most governments to continue to spend more on economic growth next year, and they are not facing a balance of payments crisis.
Brent price declines
But Brent fell at $ 58.80 a barrel on Sunday and if it stays close to that level, governments may be more cautious about spending and may borrow more, which will squeeze liquidity in banking systems. Entrepreneurs may become less willing to invest in the long term.
Saudi Arabia's index fell 1.3 percent on Sunday as all 12 banks and 13 listed petrochemicals fell, with Saudi Basic Industries Corp (SABIC) losing 1.7 percent. The only gainer in the petrochemical sector was Saudi Fertilizers Company, which rose 0.8 percent.
Anam Holding rose 4.5 percent in its most active trading since September. The stock jumped by a maximum of 10 percent on Thursday after the company signed a non-binding memorandum of understanding to buy real estate and commercial assets with Abdullah Abbar and Sons Refrigerators and Dar Al-Abar.
In addition to the drop in oil prices, weakness in the Saudi market has weakened in recent weeks due to fears that the Kingdom's relations with the West have been damaged by the killing of journalist Jamal Khashoggi.
Other Gulf markets saw lower declines on Sunday, with the Dubai index shed 0.6 percent, with Shuaa falling 3.7 percent.
Abu Dhabi's index fell 0.8 percent with Abu Dhabi Commercial Bank down 2.7 percent, while Qatar's index fell 0.7 percent as petrochemical producer Industries Qatar fell 1 percent.
Banks' shares in Egypt have collapsed
In Egypt, the main index fell 3.8 percent, with the largest bank, Commercial International Bank, falling 7.9 percent. The stock weighs about a third of the weight of the index.
A trader in Cairo said investors were selling the stock because of concern that the banking sector was affected by new regulations under consideration for the sector in Egypt, including raising the mandatory minimum capital of banks.
Faros Holding has issued a report estimating that changes in the way banks calculate Egyptian treasury bills may raise their tax rates in practice. Pharos said the new system would have reduced TIBC's net profit for the year 2017 by 17 percent.
"The parliament has not yet approved the changes and the banks are pushing for their adjustment, but there is a lot of confusion about them, which is of concern to the people," the trader said.
Shares of eight of the 10 banks traded were down, but most of the other declines were by a lower margin; Housing and Construction Bank (HDB) fell 3.6 percent.
The following are the closing levels of indices of Arab stock markets on Sunday:
Saudi Arabia: The index fell 1.3 percent to 7,513 points.
The index fell 0.6 percent to 2,739 points.
ABU DHABI - The index fell 0.8 percent to 4,946 points.
Qatar .. The index fell 0.7 percent to 10,252 points.
KUWAIT: The index rose 0.03 percent to 5268 points.
Egypt .. The index fell 3.8 percent to 13,154 points.
BAHRAIN: The index fell 0.2 percent to 1,321 points.
Oman: The index fell 0.6 percent to 4,425 points.