Most markets in the Gulf region closed trading on Thursday with a decline, with the Federal Reserve indicating that it does not intend to ease monetary policy, which prompted the release of tendering statements and decisions. to tighten by a number of central banks in emerging markets.
Most Gulf states raised interest rates on Wednesday after the US central bank raised them by three-quarters of a percentage point for the fourth consecutive time.
Saudi Arabia and the United Arab Emirates, the two largest economies in the region, raised the interest rate by 75 basis points. The Saudi central bank said in a statement that they raised the interest rate for the repo (repo) and reverse repo by 75 basis points to 4.5% and 4% respectively. The UAE raised the base interest rate to 3.9% and the increase will come in in force from today, Thursday.
The Saudi index fell 0.8%, under the pressure of a 1.6% drop in Al-Rajhi Bank’s stake and 2.1% in Riyad Bank’s stake.
The index fell 2.3% this week, which is the third weekly decline in the past four weeks.
But the National Bank of Saudi Arabia is in against the trend and rose 0.9%, continuing the gains started in the previous session.
The bank’s president said Wednesday that the bank’s investment in Credit Suisse was more tactical than strategic, adding that it plans to keep its stake in the Swiss bank for at least two years.
The bank, the kingdom’s largest, said last week that it will invest up to 1.5 billion Swiss francs ($ 1.48 billion) in the group hit by the Credit Suisse scandal, with a 9.9% stake.
Refinitiv data showed that the bank’s market value has decreased by 25.74 billion riyals ($ 6.85 billion) since October 27.
Dubai’s leading index fell 0.6%, with Dubai Islamic Bank in drop of 1.4% and Emirates NBD Bank in drop of 1.5%.
In Abu Dhabi, the index closed in down by 0.5%, with investors taking profits after a surge in earnings.
Fadi Riad, market analyst senior for the Middle East and North Africa region at Capex.com, he said falling oil prices could also put pressure on the market, according to “Reuters”.
Crude oil prices have fallen, which is a primary catalyst for the Gulf financial markets, as the US has raised interest rates to the dollar’s hike and fueled fears of a global recession limiting demand for fuel, but the concerns about lack of supplies limited losses.
The Qatar index fell 1%, under pressure from banking sector stocks, including Commercial Bank, which fell 1.6%.
HSBC cut the target price for the bank’s stake to 7.1 Qatari riyals from nine riyals and lowered its recommendation for the stock to “keep” to “buy”.
Outside the Gulf region, Egypt’s leading market index rose 0.2%, led by a 1.2% increase in Commercial International Bank.
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