Persian Gulf Shares Fall, Led by Al-Rajhi; Qatari Shares Climb

By Arif Sharif

Dec. 14 (Bloomberg) -- Persian Gulf shares fell, led by Al- Rajhi Bank and Emirates NBD PJSC, on speculation fourth-quarter earnings at banks will be affected by the global financial crisis. Qatari stocks rose for a fifth day.

Emirates NBD posted the biggest drop in December so far. Shuaa Capital PSC, the United Arab Emirates’ biggest investment bank, sank after saying it will cut its workforce.

Saudi Arabia’s Tadawul All Share Index lost 1.3 percent to close at 4,780.46 in Riyadh. The Dubai Financial Market General Index declined 1.3 percent and the Abu Dhabi Securities Exchange General Index fell 0.9 percent.

“There is still negative sentiment in the market as we are still hearing bad news, although it is better than in October and November,” said Sherif Abdel-Khalek, regional sales executive at Beltone Securities Brokerage in Dubai. “Most institutions are sitting on the sidelines and waiting for the fourth-quarter results and the impact the financial crisis has had on banks and real estate.”

Financial firms worldwide have racked up almost $1 trillion in credit losses and writedowns following the collapse of the U.S. subprime-mortgage market. While banks in the Gulf have largely sidestepped losses, they have been affected by tighter access to funding.

Automakers hurt

The U.S. administration said last week said it will consider using money from the $700 billion bank-bailout fund to prevent General Motors Corp. and Chrysler LLC from “collapsing.” A bankruptcy filing by the automakers would worsen the longest recession since the early 1980s if it led to a shutdown at the companies, economists have said. On Dec. 11, the Senate rejected a short-term aid package for the two automakers.

Al-Rajhi Bank lost 2.9 percent to 58.25 riyals, while Emirates NBD, the U.A.E.’s biggest bank by assets, retreated 2.8 percent to 3.5 dirhams.

Shuaa Capital fell 7.4 percent, the most since Nov. 23, to 1.62 dirhams. The bank said Dec. 11 it will cut 9 percent of its workforce in Dubai as it seeks to reduce costs amid the global financial crisis.

Qatar’s DSM 20 Index rose 2.6 percent, bringing the five- day advance to 8 percent. The Bahrain All Share Index added 0.5. The Kuwait Stock Exchange Index fell less than 0.1 percent, while the Muscat Securities Market 30 Index dropped 0.7 percent.

Global Investment House KSCC, Kuwait’s biggest investment bank, fell 2.6 percent to 380 fils after saying sold its 14.7 percent stake in Bahrain’s BBK. Global said it aims to focus on fee-generating businesses such as investment banking and asset management.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net