RIYADH (AFP) – Saudi shares dived at the start of trading Tuesday a day after the oil-rich kingdom announced a record $98 billion deficit this year and said it was drastically cutting fuel subsidies.
The Tadawul All-Shares Index (TASI) fell by 3.1 per cent minutes after opening to 6,777.05 points, close its lowest level this year.
Only the insurance sector rose slightly amid the losses, led by the key petrochemical sector, which shed 6.3 per cent. The banking sector also lost 2.6 per cent.
TASI and other Gulf bourses have witnessed sharp volatility throughout 2015 mainly due to the slump in oil prices that led to spending cuts by regional governments and hit corporate profits.
Saudi Arabia said on Monday it posted a deficit of $98 billion (89 billion euros) in 2015 after a sharp decline in oil revenues.
A man fills up his car at a gas station in Jeddah, Saudi Arabia, September 16. The kingdom has announced on Monday that a projected budget deficit in 2016 of $98 billion (327 billion riyals), as lower oil prices cut into the government’s main source of revenue – AP
The kingdom also projected a deficit of $87 billion for 2016, the third year in a row with a shortfall.
To counter the impact of sliding oil revenues, the world’s top crude exporter said it was applying unprecedented cuts to public subsidies on fuel, power and water.
Other Gulf markets were also down Tuesday.
Dubai dipped 0.4 per cent, Abu Dhabi 0.27 per cent, Qatar 1.1 per cent and Kuwait 0.94 per cent.
The small exchanges of Oman and Bahrain fell 0.2 per cent and 0.4 per cent, respectively.
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