Gulf Sinks on Brexit but Comes Off Lows

Middle East stocks fell sharply on Sunday because of Britain’s vote to leave the European Union but Gulf bourses came well off their lows. Egypt was hardest hit because of concern that fund inflows into the country could shrink further. Most of the Gulf does not depend heavily on foreign capital or non-oil exports, so the main threat to it from Brexit is that slower growth in Europe could push down oil prices; Brent oil sank 4.9 percent to $48.42 a barrel on Friday. Monica Malik, chief economist at Abu Dhabi Commercial Bank, said that among the six Gulf Cooperation Council economies, she expected the greatest impact of a weak pound and euro to be felt in the United Arab Emirates, because its large tourism and real estate sectors were vulnerable to exchange rate moves. “We see a weaker private consumption and investment outlook in the UAE following Brexit,” she wrote in a report.

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