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Euro zone ‘systemic crisis’ keeps Saudi market under pressure

On its last trading day of the week, the Saudi Arabian Tadawul market declined 0.16% to 6,219.95 points. Market bellwether Sabic ended flat at SR95.75. Despite solid oil prices, which rose 20% during the last six weeks, the Saudi market suffers from the on-going Euro debt crisis which is now in danger of spreading to France. Gary Dugan, CIO Private Banking at Emirates NBD in Dubai, has doubts that recent government changes in Greece and Italy will improve the delicate situation in the Euro zone. "The financial markets are taking heart that the Euro zone is seeing signs of political change. Leadership change in Greece and Italy, and pending change in Spain has given a hope that some stability can be brought to the Euro zone. New governments and new leaders however face the same problems – the need for very painful structural economic change." Meanwhile, France faced rising costs of borrowing as its investment grade rating AAA came under fresh pressure. European Commission President Jose Barroso said the Euro zone faces a "systemic crisis", dragging down the 17-state common currency Euro down to a five-week low.