Saudi, Arab States Stock Markets Collapse, Billions Lost as Iran Rises

Alwaght | News & Analysis Website

Alwaght- Stocks across the Persian Gulf Arab states tumbled as the removal of unjust sanctions against Iran raised the prospect of a surge in oil supplies to a market already reeling from the lowest prices in more than a decade. Meanwhile shares in Tehran gained.
According to the Daily Telegraph, stock markets across the West Asia region saw more than £27bn wiped off their value adding that Iran is set to flood the world oil market with millions of barrels of crude oil after the lifting of sanctions.
Panicked traders scrambled desperately to sell off their stakes in Iran’s regional rivals including Saudi Arabia and the United Arab Emirates, whose economies are hugely dependent on the price of crude oil.
Panicked traders scrambled desperately to sell off their stakes in Saudi Arabia and the United Arab Emirates, whose economies are hugely dependent on the price of crude oil.
Iran’s stock market was the only one to benefit from Saturday night’s announcement of sanctions relief, gaining one per cent as optimism grows over the Islamic Republic’s economy.
This is while Saudi Arabia's Tadawul All Share Index collapsed by seven per cent to 5,409.35, its lowest level in almost five years.
The UAE also suffered heavily, with Dubai's DFM General Index slumping by 4.8 per cent to 2,682.56.
Saudi Arabia’s stock market, which is the region’s biggest one, has tumbled an astonishing 20% this month alone as it struggles to readjust its economy to cope with oil prices in free-fall. Egypt's market also hit its lowest point in two years.
Saudi Arabia, the largest exporter of crude oil in the world, responded to the falling crude prices by introducing new austerity measures to stabilize government finances last year. However, with prices at a 12-year low, oil dependent economies of Saudi Arabia, Kuwait, Oman, Qatar and the United Arab Emirates could see more spending cuts in 2016.
Crude oil has shed more than 75 per cent of its value since last summer and now sells for less than $30 a barrel on the international markets, down from a high of 140 per cent at the height of the world financial crisis in 2010.
Meanwhile on Sunday, Iranian President Hasan Rouhani has presented the parliament, Majlis, with a draft budget that would reduce the government's reliance on oil revenues. The budget plans for an economic windfall as international economic sanctions against Iran end as part of a landmark nuclear deal.
The $75 billion budget, unveiled Sunday, is about 4.2 percent higher than the previous year's budget of $72 billion.

Alwaght | News & Analysis Website

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