Gulf markets edge up as coronavirus spreads

Saudi men walk at the Tadawul Saudi Stock Exchange in Riyadh. (File photo: Reuters)

Stock markets in the Arabian Gulf recovered slightly up Tuesday following recent slides on news of the rapid spread of the virus in several countries, including Bahrain and Kuwait.

Markets globally have reacted poorly to the virus’s spread, with the Middle East experiencing particularly strong downturns as Iran became the most deadly epicenter for the coronavirus outside of China. At least 27 people have tested positive for the virus in six countries across the Arab region after returning from Iran.

The Saudi Stock Exchange’s (Tadawul) benchmark index, the TASI, closed up 0.14 percent on Tuesday. The slide recovery the market’s biggest drop in more than nine months on Monday, with the index falling 2.94 percent.

Abu Dhabi’s main index closed up 0.11 percent with First Abu Dhabi bank leading the uptick, trading 0.12 percent up.

The Bahraini bourse saw the smallest gain of the day, closing up 0.01 percent, with commercial banks seeing the biggest rise at 8.36 percent. Meanwhile hotels and tourism stocks dropped 20.18 percent as the coronavirus fears hit the industry.

In contrast, Dubai’s main index, the DFMGI, fell 0.86 percent by the end of trading. Real estate developer Emaar fell the furthest, losing 3.17 percent of its value, with Air Arabia dropping 3.38 percent on air travel fears as the region’s airports shut down transport to contain the spread of the coronavirus.

Kuwait’s bourse was closed for a public holiday. However, authorities reported that the number of coronavirus cases rose to eight, which will likely impact the market when it opens Thursday. All of the country’s cases have thus far been travelers returning from Iran.

An Iranian parliamentary representative said on Monday that the death toll had reached 50 in the country, according to the semi-official ILNA news agency. This figure has been disputed, and Iran’s health ministry rejected the MP’s claim. Official estimates say 15, making Iran the most deadly coronavirus outbreak outside of China, with South Korea the third deadliest, reporting 10 dead.

Five of Iran’s seven neighbors, Iraq, Turkey, Afghanistan, Pakistan, and Armenia, have closed their borders to the Islamic Republic.

Other regional countries, including Saudi Arabia, Kuwait, Jordan, UAE, Oman, and Georgia have also imposed travel and immigration restrictions.

Importers of Chinese goods in Dubai have also reported that products have become significantly delayed, leaving businesses and consumers with potentially no supplies in the future as the coronavirus epidemic continues.

The IMF has previously warned that the coronavirus epidemic could knock economic growth for 2020.

“There may be a cut that we are still hoping would be in the 0.1-0.2 percentage space,” the managing director of the International Monetary Fund, Kristalina Georgieva, told the Global Women's Forum in Dubai.
 

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Last Update: Wednesday, 20 May 2020 KSA 10:02 - GMT 07:02
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