Middle East Stocks Follow Oil Price Lower

Posted by: : Shayne HeffernanPosted on: December 1, 2014 Middle East Stocks Follow Oil Price Lower

Middle East Stocks Follow Oil Price Lower

Stock markets in the Gulf Arab states took a tumble on Sunday, driven by a steep drop in global oil prices.

Oil prices fell to a five-year low of just above 70 a barrel after a meeting of the Organisation of the Petroleum Exporting Countries (OPEC) in Vienna failed to agree on a production cut to shore up prices that had fallen over 30 per cent in the past months. Bourses in Dubai, Qatar and Muscat today dropped by more than four percent, while the Abu Dhabi and Kuwait stock markets posted a day’s decline of over three percent and the Saudi Arabian equity market was down 5.5 per cent.

The United Arab Emirates’ energy minister, Suheil Mazroui, had sought to allay fears of an oil price crash, saying, “Producer and exporter nations needed a fair oil price to supply the world with energy in the next four or five years.

Kuwaiti Stock Exchange (KSE) has ended November trading sessions in the red largely due to the decline of oil prices, OPEC decision not to change output ceiling and the drop in other Gulf markets.

KSE ended today’s session with the benchmark plummeting to the level of 6,752 points, way lower than the long-held 7,000-point “psychological barrier.” The price index continued bleeding till last moments of closing the first week’s session, shedding up to 233.8 points.

Trading has been characterized with unjustified declines and rumors amid traders in addition to selling pressures over stagnant shares.

The impact of the drop in oil prices on trading was violent, manifested in the random moves by traders, especially small ones fearing more losses, analyst Ali Al-Namash told KUNA.

It was noticeable today that traders had been affected by reports over the past two days of further fall of oil prices, he added.

Today’s retreat at KSE continued a series of declines over the whole month, Analayst Adnan Al-Delimi told KUNA, noting that the price index failed to stop “the bleeding of points.”

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Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.
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