Banks' shares fall on Saudi stock market after US interest rate cut

DUBAI (Reuters) – Saudi shares fell on bank stocks on Friday following losses in global markets after interest rate cuts by the Federal Reserve and most central banks in the Gulf countries.
British Airways said. "The reasons for this weakness should be global, such as the reduction of interest rates by the Federal Reserve and trade concerns after Trump's tweets on a possible 10% surcharge on additional Chinese products," he said. Davacy, Head of Equity Research at Al Rajhi Capital.
"The impact of the Fed's interest rate reduction on Saudi banks is explained by the fact that the net interest margin has declined, while the tax additional costs indicate weaker global demand, which is negative for petrochemical prices.These two sectors representing a large part of the Saudi index, the indexes fell. "
Mohammed Faisal Boutrik, head of research at Riyadh Financial, said the Saudi market was following the fall of US stock markets on Friday, "as well as a sharp drop in world oil prices over the past two sessions."
Shares of Saudi banks have also been affected by the announcement that the Saudi group, bin Laden, is seeking a financial advisor to restructure its debt, which could range from $ 20 billion to $ 30 billion.
Goldman Sachs, an American investment bank, said Friday in a customer report that she "was receiving inquiries about the Saudi banks' exposure to the bin Laden group".
"Given the dominant position of the bin Laden group in the Saudi construction sector for many years, exposure could be important from our point of view," he said.
The Saudi index closed down 1.3%.
The National Commercial Bank (NCB), the largest bank in the kingdom, lost 2.9% and Al Rajhi Bank, the largest Islamic bank in Saudi Arabia, lost 1%.
Riyad Bank dropped by 2.5%, Saudi British Bank by 3.2% and Samba Financial Group by 3.7%.
The Federal Reserve has cut interest rates by 25 basis points (a quarter point) Wednesday night, but it is important that this step is not the beginning of a long-term trend. monetary easing.
Central banks in Saudi Arabia, the United Arab Emirates and Qatar have followed the impact of the US central bank and have reduced interest rates with the same margin. The currencies of the three countries are tied to the dollar and their central banks follow the fluctuations of US interest rates.
The Abu Dhabi index fell 1% and the first bank in Abu Dhabi, which lost 1.4%, plunged.
The Qatar index lost 0.4%, the Qatar National Bank (QNB), the largest bank in the Gulf, lost 0.8%, while Qatar Navigation lost 3.8%.
The Dubai index fell 1.5%, that of Emaar Properties by 4% and that of Emaar Development Co. by 3.6%.
"This is a typical correction," said Essam Kasabiya, a financial badyst at Mena Corp. Emaar Properties rose after the company announced it had signed an agreement with Beijing New Airlines Holdings to develop a project near the Daxing International Airport.
"But subsequent clarifications confirmed that the memorandum of understanding was not binding and guaranteed no income," he added.
After the market shutdown, Emaar said its net profit fell 3.7 percent in the first half of the year to settle at 3.11 billion dirhams, compared with 3.23 billion dirhams. a year ago.
Outside the Gulf, the Egyptian stock market has diverted the trend, closing up 0.8%. CIB, the largest bank in Egypt, was the main driver with a rise of 1.6%.
The closing levels of the stock market indices in the Middle East are as follows:
In Saudi Arabia, the index fell 1.3% to 8558 points. The Abu Dhabi index fell 1% to 5,179 points, while that of Dubai lost 1.5% to 2,857 points.
The Qatar index fell 0.4% to 10,356 points. The Kuwait index also fell 0.4% to 6.726 points.
The Bahrain index was 1549 points. The Oman index is established at 3,780 points.
In Egypt, the index rose 0.8% to 1,632 points.