Gulf stocks decline over US-Iran row

Bloomberg

Stock markets in the Gulf declined as tension between the US and Iran kept investors on high-alert.
President Donald Trump said the US will impose major new sanctions on Iran on Monday, days after he abruptly called off a plan for airstrikes against the Islamic Republic, but gave no additional detail.
The United Arab Emirates civil aviation authority ordered carriers to avoid risky air space, with Emirates and Etihad Airways re-routing flights away from areas of possible conflict.
The warning of new sanctions “could be a reasonable settlement under the pretense that oil needs to continue flowing from the Gulf to the world,” said Mohammed Ali Yasin, the chief strategy
officer at Al Dhabi Capital in Abu Dhabi.
“If the pressure continues to be diplomatic, the status quo will continue. But it becomes military action, it will affect every sector except telecoms.”
The fact that some local airlines have followed other carriers in changing flight paths has “scared people that military strikes are closer than ever before,” Yasin said.
Main stock indexes in Saudi Arabia, the UAE, Kuwait and Oman fell between 0.1 percent and 1.5 percent.
The MSCI EM stocks index advanced 3.8 percent for the week ended this weekend, and the MSCI EM FX index rose 1.2 percent.
The Tadawul All Share Index ends 1.5 percent lower, dropping more than any other in the Middle East.
Sipchem dropped for a fourth session. It plans periodic turnaround maintenance for three plants starting this week, with financial impact to be reflected on 3Q results.
National Agricultural Development Co declined 5 percent after abandoning plans to acquire a Danone unit in the kingdom.
Kuwait’s main equities gauge finishes down 0.4 percent. It’s still up 20 percent this year, more than any other major peer in the region.
Index compiler MSCI Inc to announce on June 25 after local markets close whether to upgrade Kuwait from frontier to its emerging market group.