Gulf stocks fall despite emergency measures
Dubai, October 13, 2008
Gulf bourses fell on Sunday as fear-stricken investors scrambled for cash, with Dubai's real estate sector and Qatari and Omani banks among the worst hit.
Gulf states took emergency measures to boost confidence in the financial system, including a rare cut by Saudi Arabia of its benchmark repo rate and a vow by the UAE to protect national banks and guarantee deposits.
Saudi Arabia's benchmark TASI was the only market to close up after repo lending rate cut by 50 basis points. It cut the repo rate to five per cent from 5.5 per cent for the first time since February last year. It also lowered reserve requirements to 10 per cent from 13 per cent.
The UAE promised to protect banks from credit risks and to guarantee bank deposits. The government also agreed it would pump sufficient liquidity into the system if needed and facilitate interbank lending.
Shares in Dubai's Emaar Properties dropped to the limit down, ending 10 per cent lower and dragging the index to its lowest level since March 2005. The index ended 5.41 per cent lower at 3,025 points.
Early in the session, Dubai Financial Market cut the limit down it imposes on daily stock movements to 10 per cent from 15 per cent to curb the impact of global market volatility.
In Qatar, the main index ended more than 7 per cent down near a one-and-half-year low, with banks and Industries Qatar among the top heavyweight losers.
Qatar Islamic Bank and Commercial Bank of Qatar plummeted 7.8 per cent and 7.2 per cent respectively.
In Oman, Bank Muscat and National Bank of Oman lost 7.55 and 6.8 per cent respectively, leading the index to close 5.68 per cent down to hover near a one-year low.
Abu Dhabi's index ended 2.3 per cent lower, paring early losses as attractive valuations tempt investors back to the emirate's real estate sector which they deem less risky than its Dubai counterpart.
Aldar Properties and Sorouh Real Estate ended 0.7 per cent lower and 0.21 per cent higher respectively.
Kuwait's main index eased 0.4 per cent, outperforming some of the other markets in the region as blue-chips reacted to market talk that a government arm had enacted plan to invest in the market to shore up stocks. - TradeArabia News Service