How omicron is affecting Middle East markets

DUBAI: The new Covid-19 variant, omicron, has prompted global economic concerns, as fears of its spread begin to affect stock markets and oil prices, Arab News reported.

Saudi Arabia’s main market, the Tadawul All Share Index, opened 5.3 per cent lower on Sunday, trading near 10,700 points.

The Dubai Financial Market was down 8.49 per cent in early trading, with developer Emaar Properties losing 7.9 per cent, while budget airline Air Arabia plunged 7.1 per cent.

In Abu Dhabi, the index dropped 2.3 per cent, led by a 3.1 per cent fall for First Abu Dhabi Bank, the UAE’s biggest lender, and a 3 per cent drop for telecommunications firm Etisalat.

“It’s obvious that traders are concerned about the implications of the newly mutated virus which brings back the lock-down memories from last year. If Saudi decides to impose more restrictive measures the economy will be impacted significantly and the growth prospects next year will vanish”, Mohammed Al-Suwayed, chief executive officer of Razeen Capital, said.

He said the time is now suitable for investors to reinvest in the market since the share prices are relatively low.

Oil prices stumbled in their biggest decline since April 2020, with Brent prices dropping 11.55 per cent to $72.72 per barrel when markets closed on Friday, while WTI slid 13.06 per cent down to $68.15 per barrel.

The variant was first discovered in South Africa and had also since been detected in Belgium, Botswana, Israel, the UK, Australia and Hong Kong.

Within the Middle East Israel is the only country to have reported a case of the new variant so far, but some governments in the region have issued travel curbs to prevent the virus from spreading.

On Sunday, Saudi Arabia expanded the list of African countries where it barred travel because of omicron, adding Malawi, Zambia, Madagascar, Angola, Seychelles, Mauritius and the Comoros Islands.

The kingdom earlier halted flights to and from South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Lesotho and Eswatini.

Other Middle East countries, including the UAE, Bahrain, Morocco, and Jordan have issued similar measures.

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