Saudi market falls as Iseq set to reopen
Markets in most western countries were closed for New Year's Day, however, Saudi Arabia's stock market fell yesterday after its government sharply raised domestic gasoline prices - a step that will help to cut its budget deficit but will also crimp consumers' purchasing power.
The Saudi stock index dropped 0.5pc in active trade as real estate firm Dar Al Arkan, the most heavily traded stock, plunged 10pc. It had more than doubled in price in the last quarter of 2017.
Bus operator Saudi Public Transport, which could benefit if driving of private cars is curbed by higher gasoline prices, gained 3.6pc. Car rental company Budget Saudi fell 2.6pc. Telecommunications firm Mobily was a big gainer, jumping 8.6pc in its heaviest trade since October 2015.
The energy ministry had already indicated that it would announce in the first quarter of this year a rise in gasoline prices, but the rise came earlier than some people had expected. Some had expected authorities to wait to gauge the blow to consumption from the introduction of a 5pc value-added tax at the start of this year. Together, the tax and higher gasoline prices could affect consumption significantly, although Riyadh is also introducing a system of cash handouts to lower- and middle-income households to soften the pain of reforms.
The price of Octane 91 gasoline rose to 1.37 riyals (37 US cents) a litre from 0.75 riyal, while Octane 95 rose to 2.04 riyals from 0.90 riyal. Diesel rates for trucks were left unchanged. Saudi Arabia's gasoline prices will still be among the lowest in the world.
Other major Middle Eastern stock markets were closed for New Year holidays.
Meanwhile, Ripple has become the second most valuable cryptocurrency at €75bn.