Saudi growth slows as oil gloom deepens, says International Monetary Fund

The nation may even consider selling debt in the global markets, provided oil prices stabilise and government spending continues, John Sfakianakis, the Riyadh-based Middle East director at asset manager Ashmore Group, says. The stock had come under pressure after state media said the bourse was poised to freeze trading of chairman Safwan Thabet’s shares in the company because of his alleged links to the banned Muslim Brotherhood.

In Egypt, the EGX 30 Index dropped 3.2% at the close, its biggest retreat in a month and a half, to 7,625.76 points.

The move spooked investors in Egypt, as most market participants are expecting a possible nationalization of Thabet’s stake in Juhayna.

On the plus side, a lower oil price has boosted the world economy by diverting consumer spending away from energy costs.

Another drag on the benchmark was telecommunications firm Etihad Etisalat (Mobily), which fell 4.3 percent to a fresh 6-1/2-year low of 26.70 riyals.

“Saudi Arabia’s power structure is now seemingly set for the next fifty years“, wrote Ram Kamineni, currently the first secretary and mission security officer at Canada’s embassy in Saudi Arabia in an April 29, 2015, note that was circulated among almost three dozen senior officials in the Canadian government from the military to Foreign Affairs.

More importantly, for Canada, he “has unprecedented control of the Saudi economy and can hopefully force more policy coherence in a system where everything tended to be stove-piped with little intradepartmental consultation”, the Canadian diplomat wrote of the new deputy crown prince. The Saudi banks are now left in uncertainty in regard of how many bond issues they might to be asked to buy in the short-to-mid-term.

Saudi Arabia is burning through its foreign reserves at an unprecedented rate as it struggle to cope with plummeting oil prices and the soaring coasts.

Saudi Arabia’s attempt to crush the US shale industry is backfiring.

In addition to oil output, growth in Gulf economies next year will depend on whether governments take the politically sensitive decision to restrain spending to relieve pressure on state finances.

“With employment in the government sector at a very high level, more jobs for nationals will need to be created in the private sector to employ the new labour market entrants”.

But Commercial Bank of Qatar edged up 0.2%, extending gains since index compiler MSCI announced late last week that it would almost double the stock’s weighting in its emerging markets index. Subsequently, Delek Drilling and Avner Oil gained 1.5% and 0.8%, respectively. We estimate that the significant decrease in the “call on Saudi” production last year would have required an approximately 2 mmbpd unilateral cut in production from the Saudis to balance the market.

Low oil prices, which analysts say are the main reason for the Gulf markets’ weakness this month, slipped again on Tuesday, while Asian equities fell to a two-year low on worries about cooling demand in China. Abu Dhabi fell 1.4 percent and closed exactly on its May low of 4,512 points, which is a technical support level.