Saudi Arabian markets dropped further in early trading on Thursday, after hitting an eight-month low in the last session, with banks weighing most heavily on the index, while other major Gulf markets also traded lower. The Saudi index was down 0.3 percent, down for a third straight session. The market fell as much as 2.5 percent on Wednesday, wiping out all its gains this year before clawing back some losses to close just 0.4 percent up year-to-date. The market is now trading just 0.1 percent higher for the year. It jumped as much as 20 percent between January and May, led by foreign investors who have been net buyers every month this year as Saudi stocks joined the MSCI and FTSE Russell emerging market indexes. The inclusion to the indexes caused Saudi stocks to become over-valued, with the kingdom's slowing economy teetering on the brink of contraction, which prompted investors to pull most shares down from lofty valuations. Petrochemical maker Saudi Basic Industries shed 1.2 percent and Riyad Bank dropped 1.6 percent. Qatar's index fell 0.3 percent, snapping a four-session winning streak, with Industries Qatar slipping 0.8 percent and lender Masraf Al Rayan trading 0.7 percent lower. In Abu Dhabi, the index was down 0.3 percent. Market heavy-weight First Abu Dhabi Bank edged down 0.4% and Abu Dhabi Commercial Bank lost 1.7 percent. Dubai's index slipped 0.1 percent with most property stocks drifting into negative territory. Emaar Malls slipped 1.6% while blue-chip developer Emaar Properties inched down 0.2 percent. Dubai property prices have tumbled 25-35 percent since mid-2014 and are expected to decline further this year and next amid a slowing economy and due to an oversupply of housing units. Source: Reuters
