Gulf stock investors lose $450 billion so far this year
Tuesday, 30 December 2008
DUBAI, Dec 29 (Internet): Equity investors in the oil-rich Gulf are about to bid farewell to the worst year in the region's bourse history, poorer by more than US$450 billion (Dh1.65 trillion) after accumulating a massive wealth from share profits of nearly $359 billion in 2007.
The staggering loss this year was in defiance of all market fundamentals as the bulk of companies listed on the seven stock exchanges in the Gulf Cooperation Council (GCC) achieved higher profits and the economies of the 27-year-old Gulf alliance raced at their highest rate of more than 30 per cent.
Officials and analysts in the region have cited fear from the global economic crisis and other factors for the collapse this year although the seven bourses had sharply grown in the first five months before they began their free fall just after news of the demise of the US Lehman Brothers bank in mid-September.
After reaping a staggering $359 billion in 2007, GCC equity investors saw all their wealth evaporate by the end of October. As 2008 approaches its end, their losses far surpassed their 2007 profits although experts call them paper loss.
From around $1.0 trillion at the start of 2008, the market capitalisation of the GCC stock exchanges dived to around $602.05 billion, a decline of $450.95 billion, according to figures by the Abu Dhabi-based Arab Monetary Fund (AMF), a key Arab League financial body that tracks the Arab world's 15 bourses.
All the seven bourses recorded large declines but the loss was more underscored in Saudi Arabia, Kuwait, Dubai and Abu Dhabi as they accounted for more than 90 per cent of the total GCC market capitalisation loss. Saudi Arabia's Tadawul, by far the largest and busiest bourse in the Middle East, tumbled to around $241 billion on December 25 from $456 billion on January 1.
Kuwait dived to $126 billion from $206 billion, while Dubai and Abu Dhabi plunged to $64 billion from $130 billion and to $60 billion from $113 billion, respectively. Qatar's fall was milder as it receded to $74 billion from $98 billion, while Oman fell to $15 billion from $23 billion and Bahrain to $20 billion from $27 billion.
The decline in the seven bourses through 2008 means the average daily loss was around $1.50 billion calculated by 300 days of trading sessions. The daily loss was much higher in the past two months, when it exceeded $5.0 billion.
The report showed the AMF's index for the GCC bourses has dropped sharply since the beginning of the year despite its increase in the first four months.
The staggering loss this year was in defiance of all market fundamentals as the bulk of companies listed on the seven stock exchanges in the Gulf Cooperation Council (GCC) achieved higher profits and the economies of the 27-year-old Gulf alliance raced at their highest rate of more than 30 per cent.
Officials and analysts in the region have cited fear from the global economic crisis and other factors for the collapse this year although the seven bourses had sharply grown in the first five months before they began their free fall just after news of the demise of the US Lehman Brothers bank in mid-September.
After reaping a staggering $359 billion in 2007, GCC equity investors saw all their wealth evaporate by the end of October. As 2008 approaches its end, their losses far surpassed their 2007 profits although experts call them paper loss.
From around $1.0 trillion at the start of 2008, the market capitalisation of the GCC stock exchanges dived to around $602.05 billion, a decline of $450.95 billion, according to figures by the Abu Dhabi-based Arab Monetary Fund (AMF), a key Arab League financial body that tracks the Arab world's 15 bourses.
All the seven bourses recorded large declines but the loss was more underscored in Saudi Arabia, Kuwait, Dubai and Abu Dhabi as they accounted for more than 90 per cent of the total GCC market capitalisation loss. Saudi Arabia's Tadawul, by far the largest and busiest bourse in the Middle East, tumbled to around $241 billion on December 25 from $456 billion on January 1.
Kuwait dived to $126 billion from $206 billion, while Dubai and Abu Dhabi plunged to $64 billion from $130 billion and to $60 billion from $113 billion, respectively. Qatar's fall was milder as it receded to $74 billion from $98 billion, while Oman fell to $15 billion from $23 billion and Bahrain to $20 billion from $27 billion.
The decline in the seven bourses through 2008 means the average daily loss was around $1.50 billion calculated by 300 days of trading sessions. The daily loss was much higher in the past two months, when it exceeded $5.0 billion.
The report showed the AMF's index for the GCC bourses has dropped sharply since the beginning of the year despite its increase in the first four months.