MIDEAST STOCKS-Shares retreat as investors reduce back exposure to oil-linked markets

* Oil’s drop to near 11 year lows drags down Gulf markets

* Saudi Arabia down 32 percent from 2015 peak

* Dubai worst performing Gulf market place in 2015

* Egypt monetary policy selection this week as inflation up

By Celine Aswad

DUBAI, Dec 13 Gulf bourses fell on Sunday as the crude price slumped to near 11-year lows and investors scurried to cut back their exposure to oil dependents markets.

Brent crude posted its biggest weekly percentage drop in over a year on Friday to settle at $ 37.93 soon after the International Power Agency (IEA) warned global oversupply of crude could worsen next year.

Saudi’s benchmark index plunged two.7 to 6,764 points. It is down 32 percent from a 2015 peak of 9,897 on April 30.

Brent has fallen 47 percent over the very same period.

“Low oil costs coupled with investors’ heightened nervousness about the kingdom’s spending budget has compounded volatility in the markets,” stated Hisham Tuffaha, head of equity investments at Riyadh-based Mulkia Investments.

“Overall we are in a downtrend, for some sectors this is justified, specially oil-linked industries like petrochemicals, other segments such as banks this is less so.”

Saudi Telecom Co (STC), the country’s largest telecommunications organization, dropped 1.9 %, regardless of the Kuwaiti industry regulator approving STC’s takeover strategy for Kuwait’s Viva.

The retail sector was down three.five %, with Saudi Business for Hardware (SACO) and Al Othaim losing six.three and 3.7 % respectively.

Recent retail data showed signs of weakness, as customers are shopping less and cutting back on spending at shops, according to a note by Saudi’s NCB Capital.

“The slowing development in sales transaction values is comparable to the period for the duration of the international financial crisis and oil value declines in 2008,” NCB Capital’s note added.

Dubai’s index fell two.1 % to two,883 points. It is down 23.6 percent in 2015, creating it the worst performing Gulf bourse this year.

Emirates NBD – Dubai’s biggest bank by market place value – tumbled 4.1 %, reversing earlier session gains. Dubai Islamic Bank fell three percent to five.42 dirhams, a 2015 low.

Arabtec retreated three.7 %, falling near a four-year low.

Abu Dhabi’s index dropped 2.1 % as blue-chip Etisalat, the largest stock by market value, slid two.5 %. The telecom company is up 57.2 percent this year, which has helped limit the benchmark’s year losses to 11.7 %.

Qatar’s benchmark slumped three.7 %, taking its losses for the year to 21.2 %, underperforming the MSCI emerging marketplace index which is down 19.1 %.

Economic sector heavyweights Masraf Al Rayan and Qatar National Bank dropped 6.3 and 2.1 percent respectively.

EGYPT DIPS, INVESTORS EYE CENTRAL BANK

Egypt’s bourse fell three.7 percent to six,395 points, within 93 points of November’s 2015 low.

“The sell-off is part of the declines in other Middle East markets following a drop in oil costs,” said Simon Kitchen, head of regional approach at Cairo’s EFG Hermes.

“The Egyptian marketplace is uncertain about the central bank’s interest price decision at the monetary policy meeting scheduled at the finish of this week,” Kitchen added.

Egypt’s annual urban customer inflation rose to 11.1 % in November from 9.7 percent in October, the official statistics agency CAPMAS mentioned on Thursday. That is the steepest increase in headline inflation because June.

The higher inflation figures are unlikely to influence Thursday’s central bank meeting to set interest rates, analysts told Reuters, noting the principal priority is probably to be advertising development.

Neighborhood and Arab traders had been net sellers even though foreign investors were net purchasers, exchange data showed.

Orascom Telecom and Industrial International Bank fell 7.three and four.2 percent respectively.

SUNDAY’S HIGHLIGHTS

SAUDI ARABIA

* The index fell two.7 percent to six,765 points.

DUBAI

* The index slid 2.1 percent to 2,883 points.

ABU DHABI

* The index dropped two.1 % to 4,001 points.

QATAR

* The index plunged three.7 % to 9,644 points.

EGYPT

* The index stumbled 3.7 % to six,395 points.

KUWAIT

* The index dipped 1 % to 5,633 points.

BAHRAIN

* The index fell .1 percent to 1,212 points.

OMAN

* The index slid .7 % to 5,415 points. (Editing by Matt Smith and Mark Potter)