Sharp Drops in the Gulf Stock Markets After OPEC Decision

The stock markets of the Gulf monarchies recorded heavy falls on Sunday, the first working day after the decision by OPEC to maintain current production levels, which caused a sharp drop in oil prices. The seven bags of the countries of the Gulf Cooperation Council (GCC) were closed on Friday and Saturday, after OPEC announced on Thursday that it maintained its production despite oversupply.

The Saudi floors, the largest in the Arab world, recorded a drop of 4.76% and its index, the Tadawul All-Shares Index (TASI) fell to 8,624 points, its lowest level since January. Dubai bag closed, meanwhile, down 4.74% to 4281.43 points, its lowest since June. The Dubai Financial Market (DFM) index rose, however, 27% from the previous session.

In Abu Dhabi, the index of the second bag UAE lost 2.56%, ending at 4,675 points.

Fear for the regional economy

Kuwait bag closed with a drop of 3.3% to 6754.60 points, its lowest level since March 2013. The index lost 10.5% so far this year. In Qatar, the price fell by 4.3% to 12,760.46 points.

The small bag of Oman closed with a drop of 6.2% to 6505.99 points, and Bahrain was hardly affected and ended up losing 0.46%. “It is the direct impact of the OPEC decision and fear of the consequences of low oil prices in the economy of the region,” said Ziad Chehab, vice president in charge of finding the Kuwaiti investments in company KAMCO.

I think Gulf stock markets continue to bleed for a while

Mazen al Sudairi, director of research at Alistithmar Capital in Riyadh, said, meanwhile, expect that the public and the Saudis costs remain high. OPEC’s decision was welcomed by global stock markets since the fall of oil prices should boost the economy. Falling oil prices has, however, a negative impact on the budgets of the Gulf monarchies whose oil revenues constitute 90% of their profits.

Oil prices sank on Friday a day after the OPEC meeting. A barrel of “light sweet crude” (WTI) for January delivery was down $ 7.54 on the New York Mercantile Exchange (Nymex) compared to the previous official close on Wednesday (Thursday was a holiday in the US), and placed in $ 66.15, its lowest level since September 2009.

In London, a barrel of Brent spent Friday under the symbolic dimension of $ 70 for the first time in four and a half years ago, to $ 69.78 on the Intercontinental Exchange (ICE).