Gulf stock markets continue slump
Monday, 13 October 2008
KUWAIT CITY, Oct 12 (AFP): Stock markets in the energy-rich Gulf states opened the week's trading Sunday sharply down with the Dubai Financial Market shedding 6.0 per cent.
The Saudi bourse, the largest in the Arab world, also continued its slump, shedding about half a percentage point after dropping almost 6.0 per cent Saturday, the week's opening day in oil powerhouse Saudi Arabia.
It remained below the 6,000-point mark.
The Kuwait Stock Exchange (KSE), the second largest Arab bourse, was down 2.90 per cent despite the government pumping nearly US$2.0 billion so far into the banking system.
Kuwait Investment Authority, the oil-rich emirate's sovereign wealth fund, has also injected several hundred million dollars into investment funds operating on the KSE.
The Abu Dhabi Securities Exchange, the other market in the United Arab Emirates, shed 4.20 per cent affected mainly by the real estate and energy sectors, which shed 4.40 per cent and about 6.0 per cent respectively.
The Doha Securities Market dropped 7.40 per cent to just above the 7,000-point mark.
The tiny Muscat Securities Market was down 5.30 per cent to below 7,000 points and was trading at a year's low.
At one stage, the DFM Index dropped below the psychological barrier of 3,000 points but went on to trade slightly higher at 3,016.65, down 5.70 per cent.
The slide in the DFM came after Dubai authorities changed the movement of stocks from a maximum of 15 per cent down to 10 per cent in a bid to limit losses in a single day.
Market leader giant real estate developer Emaar almost slid by the maximum cap after shedding 9.30 per cent. The real estate index was down by 9.20 per cent.
The slide in the Gulf stock markets followed the trend in Saudi Arabia.
All the Gulf stock markets experienced turbulence last week with DFM shedding 22.50 per cent, Abu Dhabi and Qatar around 19 per cent each and Saudi Arabia 17.40 per cent.
They however reversed course at the end of the week with handsome gains after several Gulf states cut interest rates to make lending cheaper, following a coordinated interest rate cut by major world central banks, and promised to inject billions of dollars into the financial system.
Gulf economists have attributed the slide in the Gulf markets to panic from the impact of the global financial turmoil that has strongly shaken investor confidence and led to a wave of sell-offs.
They also said investors were worried over the fate of Gulf government and private foreign investments, estimated at $2.5 trillion.
The massive drop in oil prices also appears to have weighed heavily on the markets in the region, which pumps about 16 million barrels per day. Crude prices closed in New York Friday below $80 a barrel.
Oil income of the six Gulf States is estimated to have dropped by one billion dollars every day from its level in July when oil prices peaked above $147 a barrel.
On Friday, the World Bank warned that a significant drop in oil prices would bring down the level of economic growth in oil-exporting countries.
The Saudi bourse, the largest in the Arab world, also continued its slump, shedding about half a percentage point after dropping almost 6.0 per cent Saturday, the week's opening day in oil powerhouse Saudi Arabia.
It remained below the 6,000-point mark.
The Kuwait Stock Exchange (KSE), the second largest Arab bourse, was down 2.90 per cent despite the government pumping nearly US$2.0 billion so far into the banking system.
Kuwait Investment Authority, the oil-rich emirate's sovereign wealth fund, has also injected several hundred million dollars into investment funds operating on the KSE.
The Abu Dhabi Securities Exchange, the other market in the United Arab Emirates, shed 4.20 per cent affected mainly by the real estate and energy sectors, which shed 4.40 per cent and about 6.0 per cent respectively.
The Doha Securities Market dropped 7.40 per cent to just above the 7,000-point mark.
The tiny Muscat Securities Market was down 5.30 per cent to below 7,000 points and was trading at a year's low.
At one stage, the DFM Index dropped below the psychological barrier of 3,000 points but went on to trade slightly higher at 3,016.65, down 5.70 per cent.
The slide in the DFM came after Dubai authorities changed the movement of stocks from a maximum of 15 per cent down to 10 per cent in a bid to limit losses in a single day.
Market leader giant real estate developer Emaar almost slid by the maximum cap after shedding 9.30 per cent. The real estate index was down by 9.20 per cent.
The slide in the Gulf stock markets followed the trend in Saudi Arabia.
All the Gulf stock markets experienced turbulence last week with DFM shedding 22.50 per cent, Abu Dhabi and Qatar around 19 per cent each and Saudi Arabia 17.40 per cent.
They however reversed course at the end of the week with handsome gains after several Gulf states cut interest rates to make lending cheaper, following a coordinated interest rate cut by major world central banks, and promised to inject billions of dollars into the financial system.
Gulf economists have attributed the slide in the Gulf markets to panic from the impact of the global financial turmoil that has strongly shaken investor confidence and led to a wave of sell-offs.
They also said investors were worried over the fate of Gulf government and private foreign investments, estimated at $2.5 trillion.
The massive drop in oil prices also appears to have weighed heavily on the markets in the region, which pumps about 16 million barrels per day. Crude prices closed in New York Friday below $80 a barrel.
Oil income of the six Gulf States is estimated to have dropped by one billion dollars every day from its level in July when oil prices peaked above $147 a barrel.
On Friday, the World Bank warned that a significant drop in oil prices would bring down the level of economic growth in oil-exporting countries.