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DUBAI- Qatar's stock market slid to a 52-month closing low on Tuesday as foreign investors sold, while Banque Saudi Fransi fell in Riyadh after France's Credit Agricole agreed to sell a 16.2 percent stake in it to local investor Kingdom Holding.
The Qatari stock index
Qatar's economy has been hit by an embargo imposed in June by neighbouring states. The wealthy government appears to have enough resources to ride out the sanctions, but its banks face higher funding costs as the other countries pull out deposits and loans.
Regional Arab investors sold Qatari stocks as soon as the embargo was imposed. With no progress made towards a diplomatic solution to the row, other foreign investors have joined them in recent weeks.
Qatar Navigation
Saudi Arabia's index
Credit Agricole is selling its stake in Saudi Fransi for 5.76 billion riyals ($1.54 billion), or about 29.5 riyals per share - suggesting a substantial discount to the market.
Under terms of the deal, Credit Agricole may sell another 5 percent of Saudi Fransi through off-market block trades. A year after the deal, it would be allowed to exit its investment entirely by selling a further 9.9 percent. That could keep downward pressure on the stock.
"What we would be looking out for is how this change in strategic shareholder will change the management style of the bank," said Shabbir Malik, a bank sector analyst at EFG Hermes. "Kingdom, although it owns a stake in Citi
The French bank had previously said it was looking to divest from Saudi Fransi, and analysts do not see the deal as pointing to more mergers and acquisitions in the sector; shares in other Saudi banks were narrowly mixed on Tuesday.
Dubai's index
Egypt's index
HIGHLIGHTS
SAUDI ARABIA
* The index
DUBAI
* The index
ABU DHABI
* The index
QATAR
* The index
EGYPT
* The index
KUWAIT
* The index
BAHRAIN
* The index
OMAN
* The index
(Additional reporting by Celine Aswad, editing by Larry King) ((andrew.torchia@thomsonreuters.com; +9715 6681 7277; Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))