Qatar’s stock market slid to a 52-month closing low on Tuesday as foreign investors sold, while Banque Saudi Fransi fell in Riyadh after France’s Credit Agricole agreed to sell a 16.2 percent stake in it to local investor Kingdom Holding.
The Qatari stock index fell 0.7 percent to 8,472 points, though it ended off the day’s low of 8,390 points as some bank stocks rebounded. Exchange data showed investors from outside the region were again net sellers.
Qatar’s economy has been hit by an embargo imposed in June by neighbouring states. The wealthy government appears to have enough resources to ride out the sanctions, but its banks face higher funding costs as the other countries pull out deposits and loans.
Regional Arab investors sold Qatari stocks as soon as the embargo was imposed. With no progress made towards a diplomatic solution to the row, other foreign investors have joined them in recent weeks.
Qatar Navigation sank 5.6 percent on Tuesday and Qatar International Islamic Bank lost 2.8 percent.
Saudi Arabia’s index dropped 0.2 percent as Saudi Fransi fell 4.2 percent to 31.60 riyals and Kingdom jumped 5.1 percent.
Credit Agricole is selling its stake in Saudi Fransi for $1.54 billion, or about 29.5 riyals per share—suggesting a substantial discount to the market. Under terms of the deal, Credit Agricole may sell another 5 percent of Saudi Fransi through off-market block trades. A year after the deal, it would be
allowed to exit its investment entirely by selling a further
9.9 percent. That could keep downward pressure on the stock.
“What we would be looking out for is how this change in strategic shareholder will change the management style of the bank,” said Shabbir Malik, an analyst at EFG Hermes.
Dubai’s index was almost flat and Abu Dhabi was 0.4 percent higher as the United Arab Emirates’ biggest bank, First Abu Dhabi Bank, rebounded 2.0 percent.