Saudi markets open lower after extended holiday

Riyadh - Saudi Arabia's stock market opened 1.46 per cent lower on Saturday in the first day the exchange traded since the Dubai debt crisis emerged a week and a half ago. The Tadawul all-share index, expected to face selling pressures, fell 92.97 points to 6,264.6 in morning trading. Financials, telecommunications, construction and other major sectors all lost ground.

Business in the largest Arab economy had been closed for an extended holiday for the Muslim festival Eid al Adha.

Saudi officials tried to ease concerns in the lead-up to the opening, saying local banks and companies had limited exposure to the debt troubles in Dubai, a city-state in the neighboring United Arab Emirates.

On November 25, Dubai World holding company said it would need a six-month freeze on repaying its obligations, having racked up 59 billion dollars in liabilities. Earlier this week, it announced plans to restructure 26 billion dollars of debt at Nakheel and Limitless, two major subsidiaries.

Nakheel has a 4 billion dollar Islamic bond due on December 14. Estimates say at least half of its debt is held by investors outside the Gulf region.

Markets around the world slumped when the news broke, though they have mostly rebounded since, as the restructuring and offers of liquidity by the UAE Central Bank helped ease fears of a contagion.

However, concerns remain about other debt problems and the ability to reach a deal with creditors.

Source: Earth Times.
Link: http://www.earthtimes.org/articles/show/297884,saudi-markets-open-lower-after-extended-holiday.html.