Saudi shares decline sharply ahead of Riyadh meeting

The Saudi index fell below 6000 points to 5564 during the session before closing at 5.624 points, which is its lowest point in almost four years.

The market effectively ignored the Riyadh meeting, which issued highly important decisions to deal with the negative fallout of the international crisis on the Gulf economies.

Riyadh Meeting

Gulf ministers decided to enhance the government presence in the financial sector calling on Gulf sovereign funds to invest in local stock markets.

The meeting has also called on local governments to pump in more assets to guarantee liquidity, as well as guaranteeing the banks assets.

Ministers expressed fears about the continuous decline of oil prices despite OPEC's decision to lower production by 1.5 million bpd. The meeting has also confirmed that the single GCC currency will be launched by 2010 according to schedule.

The Saudi market followed the Asian, American and European bourses which ended their week on a sharp decline.

All 125 traded shares fell, with no single rising share.

The market saw no entry of a major buyer and a state of fear prevailed after all leading and non-leading shares fell by the maximum limit expect Samba which managed to decline by 3%, while the heavywieght Sabic fell by 9.7%, its lowest point in four years.

All leading shares registered a sharp decline, including Al Rajhi, Saudi French, Arab National Bank, Inmaa, Petrorabigh, Kayan, Yansab, Safco, Zain, Mobily and STC.

Many shares fell below their IPO price including Kingdom Holding.

KHC share fell by 9.4% to SR5.30, while Electricity price fell by 6% to SR9.40.

The record profits announced by a number of firms failed to stop the decline at the market including Dar Al Arkan which fell by 9.9% despite announcing SR1.7bn profits.