Saudi stocks dive after finance minister vows ‘painful’ measures | Money

An investor walks past a screen displaying stock information at the Saudi Stock Exchange in

An investor walks past a screen displaying stock information at the Saudi Stock Exchange in Riyadh June 29, 2016. — Reuters pic
An investor walks past a screen displaying stock information at the Saudi Stock Exchange in Riyadh June 29, 2016. — Reuters pic

DUBAI, May 3 — Saudi shares slumped 6.8 per cent as trading opened today, a day after the finance minister announced “painful” measures to tackle the economic impacts of the coronavirus pandemic.

Almost all the listed stocks on the Arab world’s largest bourse were in the red just minutes after the start of trading.

Finance Minister Mohammed al-Jadaan said late yesterday that the kingdom would take “drastic measures” to face the double shock of the novel coronavirus and low oil prices.

“Some of these measures could be painful,” he said in an interview with Saudi-owned news channel Al-Arabiya.

He said the world’s leading crude exporter would borrow close to US$60 billion (RM257.8 billion) this year to plug a huge budget deficit.

Saudi Jadwa Investment, an independent think-tank, forecast Thursday that the kingdom would post a record US$112 billion budget deficit this year.

The International Monetary Fund in April projected that the Saudi economy would contract by 2.3 per cent this year. 

Capital Economics, a London-based think-tank, said the contraction would be at least 5.0 per cent.

In other bourses in the oil-rich Gulf, Dubai Financial market dropped 3.2 per cent today while its sister Abu Dhabi Stock Exchange was down 1.6 per cent.

Qatar’s bourse was 0.6 per cent lower while Kuwait’s premier index and all-shares index were 1.0 per cent and 0.8 per cent, respectively.

The small bourses of Oman and Bahrain were flat.

Oil revenues make up at least 70 per cent of public revenues in each of the six Gulf Arab states. — AFP

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