Sunday, December 6, 2009

Saudi monetary official plays down Dubai impact on bks

Saudi Arabia's top monetary official on Friday sought to reassure investors and play down the impact of Dubai's debt crisis ahead of the first day of stock market trading in the kindgom since the news broke.

"The group's (of Saudi banks) exposure to Dubai World is very limited," Muhammad al-Jasser, governor of the Saudi Arabian Monetary Agency, told Saudi-owned Al-Arabiya television.

"If we look at the total balance of all Saudi banks ... exposure to Dubai World is less than 2 in a thousand," he said, without clarifying the comparison.

The Saudi bourse opens on Saturday, its first trading day since government-owned Dubai World requested a payment standstill on Nov. 25 for USD 3.52 billion worth of Islamic bonds maturing this month as it looks to restructure USD 26 billion worth of debt.

"What happened in the markets outside of the Arab region is much worse than what has happened and what will happen in the Arab region," Jasser said. "If there are any concerns ... there are no risks (and no reason) to exit the market or sell any shares because of this problem."

Fallout from Dubai's announcement impacted markets worldwide and spread across the Gulf as the region's markets began to reopen after an extended break for the Muslim holiday of Eid al-Adha.

Markets in Dubai and Abu Dhabi extended losses on Dec 1, shedding 5.6% and 3.6% respectively. Stocks in Qatar, Kuwait and Bahrain all suffered steep falls after trading resumed on Dec 1 but have since stabilised.

"There is no danger for the banking sector in the kingdom," Jasser said, adding it would be up to the banks to decide on provisions they may need in the future.

Saudi Arabia's index is the best performing market in the Gulf Arabia region this year.

Source:moneycontrol.com/

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