Arab bourses suffer as Gulf stock loses $538 bn

November 21st, 2008 - 9:15 pm ICT by IANS  

Amman, Nov 21 (DPA) Arab stock markets continued their downward journey this week, with financial analysts Friday citing unjustified “panic and psychological pressures” from the turmoil on global markets.According to a report by the Kuwait-based Global International Investments House released Friday, the stocks of the oil-rich six member states of the Gulf Cooperation Council, lost 47.5 percent of their value, or $538 billion since the beginning of the year.

The report put the losses since the beginning of the global financial crisis in October at $373 billion.

The Economist magazine put the losses of all Gulf sovereign funds over the past six weeks at about $400 billion.

“I believe regional markets are still a captive of lack of confidence, panic and psychological pressures due to the spillovers from the tampering world markets,” Wajdi Makhamreh, chief operating officer at the Amman-based Sanabel International Holding, said.

“I think the psychological situation has been aggravated by rapidly falling crude prices and the feeling of investors that the governments are unable to liquidate their surplus petrodollars invested in the West,” he said.

Makhamreh believed that “when the dust of the world economic turmoil settles, oil-rich Arab countries will find it plausible to divert their investments in the West to the Arab world, where the risk could turn out to be less.”

Saudi shares slid anew this week under selling pressures from the petrochemical and banking sectors.

The Tadawul All Share Index (TASI) of the Arab world’s largest bourse plummeted 11 percent this week to 4,880.44 points, the first time the Saudi benchmark has broken the psychological 5,000-point-barrier downward in 56 months, analysts said.

TASI has lost 55.7 percent of its value since the beginning of the year.

Jordanian shares plunged further this week, led by blue chip firms, particularly the Arab Potash Co., the Jordan Phosphates Mines Co. and the Jordan Petroleum Refinery.

The all-share price index of the Amman Stock Exchange (ASE) tumbled 7.55 percent this week, closing at 2,771 points.

The Kuwait stock exchange, which has been the scene of extensive losses since the beginning of October, was the only Arab stock market to close the week in positive territory.

The KSE all-share price index gained 2.1 per cent this week, closing at 8,691 points.

This week’s gains were attributed by the Gulf Invest brokerage to a report that Emir of Kuwait, Sheikh Sabah al-Ahmad al-Sabah, could be mulling dissolution of parliament if the row between the government and the opposition worsens.

The state-owned Kuwait Investment Corporation (KIC) also reportedly entered the market to buy battered stocks over the past couple of days.

Egypt’s CASE 30, measuring the performance of the market’s 30 most active stocks, sank 19 percent this week, to 3,878 points due to continuing sell-off by foreign investors, analysts said.

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