November 1, 2015 / 1:02 PM / 4 years ago

MIDEAST STOCKS-Major markets fall on Saudi debt downgrade

* S&P feeds into concern about looming Saudi tightening
    * Markets as far afield as Egypt are worried
    * Kingdom Holding rises on SRMG stake sale
    * Dubai index breaks technical support
    * National Bank of Oman surges in thin trade

    By Andrew Torchia
    DUBAI, Nov 1 (Reuters) - Major Middle Eastern stock markets
fell on Sunday after Standard & Poor's cut its rating of Saudi
Arabia's sovereign debt and maintained a negative outlook on it,
citing damage to state finances from low oil prices. 
    The downgrade will have almost no direct financial impact on
Saudi Arabia because the government and Saudi companies have
minimal foreign debt. The world's other two major rating
agencies, Moody's and Fitch, have higher ratings for the kingdom
than S&P. 
    But S&P's action fed into investor concern about the
long-term direction of Saudi finances in an era of cheap oil,
and about the fiscal tightening that Riyadh will probably have
to conduct next year to get its budget deficit under control. 
    The prospect of a slowdown in Saudi Arabia has been
worrying investors in Middle Eastern markets as far afield as
Egypt, because of the flows of Saudi money around the region.
    The Saudi stock index dropped 1.1 percent to 7,046
points, nearing technical support at its August low of 6,921
points.
    Alinma Bank slid 3.3 percent and Emaar Economic
City, developer of a major industrial zone, lost 2.6
percent. However, petrochemical blue chip Saudi Basic Industries
 rose 0.6 percent.
    Investment firm Kingdom Holding climbed 2.0
percent after saying it would sell its 29.9 percent stake in
media firm Saudi Research and Marketing Group for
837.2 million riyals ($223 million) in a private off-market
transaction at 35 riyals per share. 
    SRMG shares last traded in the market on Wednesday at 18.80
riyals, having soared from 13.0 riyals in heavy trade over the
previous six days.
    The Dubai stock index sank 2.1 percent to 3,431
points, breaking technical support around 3,500 points, which
had supported it since early September. The market's next chart
support is the August low at 3,241 points.
    All of the market's 10 most heavily traded stocks dropped,
with builder Arabtec, which has projects in Saudi
Arabia, losing 4.3 percent.
    Abu Dhabi's index fell 0.5 percent but National
Bank of Abu Dhabi, the United Arab Emirates' biggest
listed lender, climbed 1.7 percent after a drop last week due to
disappointing third-quarter earnings.
    Qatar, seen as a defensive market because of high
dividend yields and the Qatari government's comfortable
financial position, edged down just 0.2 percent.
    Stocks were generally slightly stronger in Kuwait, Oman and
Bahrain, which are thinly traded and therefore less exposed to
the market trend in Saudi Arabia. National Bank of Oman 
jumped 7.3 percent in low turnover.
    Egypt's stock index <.EGX 30> slipped 1.3 percent.
Investment firm Qalaa Holding dropped 5.9 percent
after one of its subsidiaries said it planned to sell its stakes
in ASEC Minya and ASEC Ready Mix to Misr Cement (Qena) for 1
billion Egyptian pounds ($125 million). 
    GB Auto fell a further 7.0 percent. It had tumbled
4.9 percent on Thursday after saying production at some of its
factories had been halted for 20 days during September and
October by delays in receiving supplies.

    SUNDAY'S HIGHLIGHTS
        
    SAUDI ARABIA
    * The index dropped 1.1 percent to 7,046 points.
        
    DUBAI
    * The index fell 2.1 percent to 3,431 points. 
    
    ABU DHABI
    * The index dropped 0.5 percent to 4,299 points.
    
    QATAR
    * The index edged down 0.2 percent to 11,586 points.
    
    EGYPT
    * The index slipped 1.3 percent to 7,413 points.
    
    KUWAIT
    * The index edged up 0.1 percent to 5,780 points.

    OMAN
    * The index rose 0.3 percent to 5,948 points.
    
    BAHRAIN
    * The index edged up 0.1 percent to 1,251 points.

 (Editing by Andrew Roche)
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