News / Africa
Stock exchange tumbles down
29 Jan 2011 at 12:27hrs | Views
CAIRO – Saudi Arabia's stock exchange tumbled by over 6 percent on Saturday, setting the stage for other regional markets to drop as concerns mounted about the violent protests in Egypt.
The Tadawul All Shares Index fell 6.44 percent to close at 6,267 points. The market in Saudi Arabia, where the start of the work week is Saturday, was the first to react to the violence in Egypt and the drop in the TASI offered a window into the potential battering that could emerge when other regional markets reopen on Sunday.
"The fall is due to sentiment about what's happening in Egypt, and also in the US because the Dow went down" on Friday, said John Sfakianakis, chief economist at the Riyadh-based Banque Saudi Fransi-Credit Agricole Group.
"You have some collateral damage which is related to investors .... who have exposure in Egypt, and are trying to hedge that exposure by selling down their positions in Saudi Arabia," he said.
Egypt's stocks exchange canceled its start-of-week session on Sunday, and the country's banks were to remain closed following the weekend, Egyptian state television reported. Some banks in Cairo had been looted on Saturday as the violence entered its fifth day.
The protesters have demanded President Hosni Mubarak's ouster and measures to deal with the crippling poverty in the country, rampant corruption and the growing disparity in income distribution.
The rioting - inspired by similar protests in Tunisia two weeks earlier - prompted Mubarak to ask his cabinet to step down. But that move appears unlikely to significantly allay the anger of Egyptians who argue that the 82-year-old leader of the Arab world's most populous nation is sorely out of touch with their daily lives.
The violence sent Egypt's benchmark index tumbling almost 17 percent over two days ending Thursday, and analysts expect that the unrest will fuel another plunge both in Egypt and in regional markets which are slated to reopen on Sunday.
"The momentum is there," said Sfakianakis, predicting that regional markets drop.
"There's no reason to expect the Saudi market to go up because the general sentiment is sell-off and wait- and-see rather than sell-off and immediate buying," he said.
On the Saudi market, there were no gainers as investors sold off holdings. Hit hard
was Sabic, one of the world's largest petrochemical companies and the largest publicly traded firm on the exchange. Sabic's shares fell 8 percent, closing at 97.75 Saudi riyals.
The Tadawul All Shares Index fell 6.44 percent to close at 6,267 points. The market in Saudi Arabia, where the start of the work week is Saturday, was the first to react to the violence in Egypt and the drop in the TASI offered a window into the potential battering that could emerge when other regional markets reopen on Sunday.
"The fall is due to sentiment about what's happening in Egypt, and also in the US because the Dow went down" on Friday, said John Sfakianakis, chief economist at the Riyadh-based Banque Saudi Fransi-Credit Agricole Group.
"You have some collateral damage which is related to investors .... who have exposure in Egypt, and are trying to hedge that exposure by selling down their positions in Saudi Arabia," he said.
Egypt's stocks exchange canceled its start-of-week session on Sunday, and the country's banks were to remain closed following the weekend, Egyptian state television reported. Some banks in Cairo had been looted on Saturday as the violence entered its fifth day.
The protesters have demanded President Hosni Mubarak's ouster and measures to deal with the crippling poverty in the country, rampant corruption and the growing disparity in income distribution.
The rioting - inspired by similar protests in Tunisia two weeks earlier - prompted Mubarak to ask his cabinet to step down. But that move appears unlikely to significantly allay the anger of Egyptians who argue that the 82-year-old leader of the Arab world's most populous nation is sorely out of touch with their daily lives.
The violence sent Egypt's benchmark index tumbling almost 17 percent over two days ending Thursday, and analysts expect that the unrest will fuel another plunge both in Egypt and in regional markets which are slated to reopen on Sunday.
"The momentum is there," said Sfakianakis, predicting that regional markets drop.
"There's no reason to expect the Saudi market to go up because the general sentiment is sell-off and wait- and-see rather than sell-off and immediate buying," he said.
On the Saudi market, there were no gainers as investors sold off holdings. Hit hard
was Sabic, one of the world's largest petrochemical companies and the largest publicly traded firm on the exchange. Sabic's shares fell 8 percent, closing at 97.75 Saudi riyals.
Source - Byo24NEWS
