Complex Made Simple

Paul Krugman’s pessimism on oil drags down Saudi market

The Tadawul All-Share Index plummeted 3.27 per cent to hit 8,119.08 points on Sunday, December 14.

Earlier in the day, renowned U. S. economist and 2008 Nobel prize laureate Paul Krugman (picture) said in Dubai at the Arab Strategy Forum on his outlook for 2015 he is worried about deflation in Europe and a “dangerous cocktail” of a falling Ruble currency and the oil price decline in Russia which had the taste of major economic crisis in the world’s biggest country in relation to surface. Both scenarios would dampen demand for oil further which would translate into lower revenues for Saudi Arabia, the biggest producer of the “black gold” in the Middle East.

Only seven shares advanced in Riyadh, while a whopping 151 stocks declined in value. Blue chips too a beating and were the most liquid shares. SABIC outperformed by losing “only” 1.30 per cent to SAR80.50. Al Rajhi Bank, the biggest Islamic bank in the GCC dived 2.94 per cent to SAR52.75. Amid the decline in most commodities and metals, Saudi Arabian Mining Company edged lower by 9.70 per cent to SAR28.30.

Gerard Al-Fil