UAE- GCC markets wake up to bears in first trading day after Brexit result
Date
6/27/2016 2:47:40 AM
(MENAFN- Khaleej Times) Bears overpowered bulls on Sunday in the energy-rich Gulf countries on the first trading day after the UK voted to leave the European Union bloc.
All seven Gulf markets were closed for the Muslim weekend on Friday when the result of the British referendum was announced. Despite the fact that Gulf bourses react mainly on oil price movements, all capital markets in the region fell on Brexit. Stocks prices in most regional markets dropped sharply at the start of trading on Sunday, but had recovered some of the losses by the close. The Dubai Financial Market General Index started the day by sliding five per cent, but finished down 3.25 per cent - the most since January. Saudi stocks fell 4.1 per cent at the opening time but recovered to close down just 1.1 per cent. Al Masah Capital in a research note predicted that regional markets to exhibit volatility from Brexit tremors in the coming week especially with the reduced volumes during the holy month of Ramadan. Volatility is not necessarily a bad thing and can be a friend to the long-term investor as it affords them the ability to purchase undervalued securities, it added. Global markets witnessed about a $3 trillion loss in equity values on Friday following the UK''s referendum on EU membership. Amid the volatility, oil, the biggest source of income for governments in the Gulf region, fell the most in four months. "There''s a lot of uncertainty over Brexit, and traders hate that," said Hatim El Atabani, the Abu Dhabi-based head of prime equity brokerage at Al Ramz Capital. "I want to know who the sellers are. If it''s foreigners, then this selling pressure could last a few days, because it''ll take a while for them to sell their positions given how low volumes have been" in recent days. The Abu Dhabi Securities Exchange benchmark index lost nearly two per cent to close at 4,416.28 points. The Qatar Exchange dropped 1.25 per cent, and the Kuwait Stock Exchange closed 1.1 per cent lower. The Oman and Bahrain bourses ended the day down 0.6 per cent and 0.7 per cent, respectively. -
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