Complex Made Simple

GCC stock markets shed $122bn in August

Saudi Arabian Tadawul was the most hit due to the mayhem in the market, losing a massive $88.2 billion

Stock markets in member states of the Gulf Cooperation Council (GCC) shed a combined total of $122 billion of their market capitalisation in August, following wide sell-offs fuelled by the downhill slope of oil prices and the uncertainty over global economic growth.

Saudi Arabia’s stock exchange was the most hit due to the stock market mayhem, losing a massive $88.2bn, according to data compiled by Mubasher. The Dubai bourse shed $10.9bn while the Muscat and Bahrain markets reported lower losses.

In August, the main index of the Saudi bourse retreated by 17.3 per cent, the lowest since the global economic meltdown in 2008 when the index sank by more than 25.7 per cent.

Two of Tadawul’s (the Saudi stock exchange) heavyweight shares (SABIC and Al-Rajhi Bank) lost 14.1 per cent and 2.67 per cent of their value respectively.

Dubai’s market reported the largest monthly retreat since the beginning of the current year after the index edged down by 11.6 per cent.

The region’s markets panicked after mounting fears of a China-triggered global economic slowdown, says Muhammed al-Asar from NBK Capital.

Market instability was further exacerbated by the steep fall of oil prices which sank to a six-year low in August to below $45 a barrel, Al-Asar explains. Forecasts indicate that demand on oil will pick up over the next five years but the supply glut will carry through 2016.

($1 = AED3.67, at the time of publishing)