DUBAI: Middle East markets may deepen losses on Monday as investors wait for governments to announce their annual spending plans and after falling crude prices dragged global stocks lower.
Brent futures fell 0.5 percent to $37.75, declining for a seventh straight session, its longest losing streak since mid-2014, as an International Energy Agency warning a global supply glut was likely to worsen next year weighed on prices. Asian stocks were also down.
Gulf markets took a hefty hit on Sunday. Qatar’s benchmark tumbled 3.7 percent to be the day’s biggest loser. Dubai’s index also slid and has fallen 23.6 percent this year, making it the worst performing Gulf bourse in 2015.
Saudi Arabia’s benchmark plunged 2.7 percent to 6,764 points. It is down 32 percent from its 2015 peak, reached in April.
“Investors are not willing to enter markets until the kingdom’s budget is announced,” said Hisham Tuffaha, head of equity investments at Riyadh-based Mulkia Investments.
Saudi’s annual budget, due to be announced this month, is expected to include spending cuts and a drive to raise revenue from new sources as it lays out a strategy to cope with an era of cheap oil.
In Kuwait, Viva’s shares could face selling pressure after parent firm Saudi Telecom Co (STC) said it would offer 1 dinar per share to buy up Viva’s remaining stock.
Viva shares have gained 20 percent since STC’s initial takeover announcement in November, ending Sunday at 1.1 dinars.
Egypt’s bourse fell 3.7 percent on Sunday, to be within 93 points of November’s 2015 low.
Egypt’s central bank injected foreign currency liquidity into the banking system in a surprise move on Sunday, bankers said, the latest in a series of steps aimed at ending a foreign exchange shortage.
“Market reaction is unclear given there are other external systemic risks that could thwart the dollar injection,” said a Cairo-based trader.
Investors are more risk averse because of extremely low oil prices and as they await the Egyptian central bank’s decision on interest rates due on Thursday, he said.
“Foreign investors could give their vote of confidence for the currency injections by buying stocks at now lower prices, but locals and Gulf nationals may continue selling,” the trader added.
Local and Arab traders were net sellers while foreign investors were net buyers on Sunday, exchange data showed.