JEDDAH: Gulf stock markets rose on Thursday amid hopes for a global deal to prop up oil prices, as investors largely ignored sharp downgrades of the credit ratings of three nations in the region.
Saudi Arabia’s Tadawul All-Share Index gained 1.4 percent in heavy trade for its fourth straight day of gains as the biggest petrochemical maker, Saudi Basic Industries Corp, climbed 2.6 percent.
The banking sector index rose 1.4 percent. Petrochemical Industries index has gained more than 8 percent over the past 5 days.
John Sfakianakis, a Riyadh-based economist, told Arab News: “The downgrade of Saudi Arabia was emotional and erratic and is baseless given that there is little material change to the macro economic position of Saudi Arabia between October 2014 and this February.”
He added: “Saudi Arabia still holds more than 100 percent of its GDP in foreign assets and the budget deficit is estimated to be lower in 2016 by two percentage points compared to 2015.”
Sfakianakis said that the balance sheet of Saudi Arabia is healthy which provides cushioning over the next few years.
Saudi Arabia’s fiscal consolidation is on track given the efficiency measures it’s taking on its capex and opex front, he said.
Saudi Arabia is among the healthiest of the oil producing countries of the world, Sfakianakis pointed out. There will be no change in the currency status quo. There will be no devaluation and no depegging.
The economist’s remarks follow Standard & Poor’s move to cut Saudi Arabia by two notches to A- from A+, while Bahrain lost its investment grade status; Oman was lowered to the last rating above junk status.
The downgrades underlined the damage to state finances in the region from cheap oil, Reuters said.
But local retail investors focused on Wednesday’s more than 7 percent jump in oil prices after Iran endorsed the idea of producers capping their output — although Tehran did not commit itself to any action.
Jabal Omar Development rose 3.0 percent after saying it had signed an agreement with the Ministry of Finance to defer payments on an SR3 billion loan; it had missed a first payment on the loan in January.
National Metal Manufacturing surged its 10 percent daily limit after saying its 2015 net profit jumped 41 percent.
S&P’s downgrade of Saudi Arabia is expected to trigger downgrades of some Saudi banks in coming days as the country ceiling is lowered, but Saudi banks rely little on overseas debt, so the impact on them will be tiny, Reuters added.
Saudi Arabia’s Tadawul All-Share Index gained 1.4 percent in heavy trade for its fourth straight day of gains as the biggest petrochemical maker, Saudi Basic Industries Corp, climbed 2.6 percent.
The banking sector index rose 1.4 percent. Petrochemical Industries index has gained more than 8 percent over the past 5 days.
John Sfakianakis, a Riyadh-based economist, told Arab News: “The downgrade of Saudi Arabia was emotional and erratic and is baseless given that there is little material change to the macro economic position of Saudi Arabia between October 2014 and this February.”
He added: “Saudi Arabia still holds more than 100 percent of its GDP in foreign assets and the budget deficit is estimated to be lower in 2016 by two percentage points compared to 2015.”
Sfakianakis said that the balance sheet of Saudi Arabia is healthy which provides cushioning over the next few years.
Saudi Arabia’s fiscal consolidation is on track given the efficiency measures it’s taking on its capex and opex front, he said.
Saudi Arabia is among the healthiest of the oil producing countries of the world, Sfakianakis pointed out. There will be no change in the currency status quo. There will be no devaluation and no depegging.
The economist’s remarks follow Standard & Poor’s move to cut Saudi Arabia by two notches to A- from A+, while Bahrain lost its investment grade status; Oman was lowered to the last rating above junk status.
The downgrades underlined the damage to state finances in the region from cheap oil, Reuters said.
But local retail investors focused on Wednesday’s more than 7 percent jump in oil prices after Iran endorsed the idea of producers capping their output — although Tehran did not commit itself to any action.
Jabal Omar Development rose 3.0 percent after saying it had signed an agreement with the Ministry of Finance to defer payments on an SR3 billion loan; it had missed a first payment on the loan in January.
National Metal Manufacturing surged its 10 percent daily limit after saying its 2015 net profit jumped 41 percent.
S&P’s downgrade of Saudi Arabia is expected to trigger downgrades of some Saudi banks in coming days as the country ceiling is lowered, but Saudi banks rely little on overseas debt, so the impact on them will be tiny, Reuters added.
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