Monday 23 April 2018

Gulf bourses slump on banking, recession worries

Dubai, October 27, 2008

Gulf Arab markets fell across the board crippled by investor fears after Kuwait stepped in to a save a local bank and international markets crumbled on recession fears.

'Unfortunately our shares' performance is still directed by global events,' Rami Sidani, head of Middle East and North Africa, at Schroders said.

'The negative sentiment prevailing on the international market is determining the share price performance.'

Gulf bourses, treading water in early trade, turned abruptly lower after European markets fell to fresh 5-1/2 year lows at the open, echoing a slide in Asia.

Emerging market equities fell to their lowest since September as investors worried that a barrage of central bank support would not be enough to escape a global recession.

In Dubai, the index tumbled to its lowest close since March 2005, falling 5.8 per cent. Bank stocks in particular have taken a beating in the wake of Kuwait's move to step in and save Gulf Bank, which faces big derivatives losses.

The troubled bank sought to assure customers it was operating normally despite hasty withdrawals by clients on Monday and investors urged the government to resign over its handling of the global crisis.

'Kuwait has very bad news on banking sentiment because of Gulf Bank so negative sentiment will prevail. It will take a little time for them to come back from that,' said a trader.

The measure closes 2.22 per cent lower at 9,889 points on broadbased weakness, particularly among financial stocks.

Gulf Bank seeks to assure customers it was operating normally despite hasty withdrawals by clients and investors urge the government to resign over its handling of the global financial crisis.

The Dubai benchmark index drops 5.8 per cent to 2,922 points, its lowest level in 3-1/2 years.

Emaar Properties falls 9.25 percent. Shuaa Capital loses 4.29 percent. Shuaa said on Monday it wanted to buy back up to 55 million shares, or 10 percent share of its issued stock, pending regulatory approval.

The Saudi index, which is down 50 percent this year, closes off 4.17 per cent at 5,301 points, its lowest level since at least January 2007.

Saudi Arabia's central bank governor says sharp declines on the local stock market were due to poor investor sentiment stemming from the global financial turmoil, not economic fundamentals.

Qatar's benchmark closes down 1.46 per cent at 6,792 points. Commercial Bank of Qatar loses 6.34 per cent as a slew of stocks shed more than 9 per cent amid fears the financial crisis may last longer than expected.

The Gulf Arab state downplays the impact of the global credit crisis on its investment plans. The Abu Dhabi benchmark index loses 2.01 percent to 3,321 points.

First Gulf Bank drops 10 percent. The UAE's central bank governor says a liquidity crunch in the country's banking sector is stabilising. Central bank governor also says UAE banks should consider mergers to enable them to lower costs.

The Muscat main index sinks 7.45 percent to 6,021 points, its lowest close since June 2007. Lebanese Market heavyweight Solidere closes down 14 percent, drags index down 7 percent.-Reuters

Tags: Fall | Gulf bourse |

More Capital Market Stories

calendarCalendar of Events