Saturday, December 05, 2009
DUBAI: The head of the Saudi Arabian Monetary Agency said on Friday that the kingdom’s banking sector is not in danger over the Dubai World debt crisis.
“There is no danger to the banking system in the kingdom from the debt of the Dubai World group,” Mohammad al-Jasser told Al-Arabiya news channel, a day before the Saudi stock market opens after a long holiday marred by Dubai’s debt alert which sent jitters throughout global and Gulf markets.
He said that the exposure of Saudi banks to Dubai World debt is less than 0.2 percent of their balances.
Jasser urged investors in the Saudi stock market — the largest Arab bourse — not to be worried about the impact of the Dubai debt woes. “There is no danger that should force them to run away from the market,” he said.
Saudi banks have not disclosed their exposure to Dubai entities, but Deutsche Bank estimates Gulf countries represent 3.3 percent of all their risk assets, with only one percent in Dubai.
Banks make up a key part of the Saudi stock market, but about 20 percent of capitalisation comes from one company, Saudi Basic Industries (SABIC) whose price is driven by petrochemical prices, which have been on the upswing.
Bankers nevertheless expect the Saudi stock exchange not to be immune to the selling pressure that hit other Gulf markets.
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