Gulf markets rebound after four days of mayhem (Roundup)October 9th, 2008 - 8:31 pm ICT by IANS
Dubai, Oct 9 (IANS) Gulf markets rebounded Thursday after four days of mayhem sparked by the global financial crisis as central banks in the region announced interest rate cuts in line with similar moves in other parts of the world.Except for Saudi Arabia, where the bourse remained closed on account of the weekend holiday, markets in Dubai, Abu Dhabi, Kuwait, Bahrain, Muscat and Doha all posted gains at the close of trading Thursday.
The resurgence came following interest rate cuts and assurances of liquidity announced by the central banks of the United Arab Emirates (UAE), Kuwait and Bahrain.
Oman led the upsurge with the key Muscat Securities Exchange index closing at 7,178.51 points, up 8.32 percent from the previous day’s close of 6,626.96.
Among the major gainers were National Bank of Oman, which ended 9.57 percent up, Bank Muscat (up 8.97 percent) and telecom major Omantel (up 9.99 percent)
The Dubai Financial Market (DFM) closed at 3,198.09 points, 3.67 percent higher from Wednesday’s close.
Among the main gainers in Dubai was real estate major Emaar Properties, which posted a gain of 3.64 percent and Arabtec (up 13.09%).
Low cost carrier Air Arabia also ended with a 10.19 percent gain.
In Kuwait, whose central bank was the first to announce interest rate cuts in the region, the main index jumped 433.7 points from Wednesday’s close to end at 11,905.70.
The banking index rose 883.7 points followed by services (682 points) and investments (591.7 points).
The International Investment Company was the biggest gainer, rising by 10 percent.
The Abu Dhabi Securities Exchange (ADX) was the only bourse in the region that started the day in the red, falling to a yearlong low of 3,124.73 points, before shrugging off the pressure and closing the day at 3,207.30, up 0.96 percent from Wednesday.
Banks and real estate companies were the main gainers.
The Bahrain Stock Exchange, too, posted a marginal gain of 0.45 percent from Wednesday’s close to end at 2,330.43 points.
In Qatar, the Doha Securities Market rose 1.87 percent from the previous day’s close to end at 7,573.62 points.
Industries Qatar rose 1.8 percent, while Qatar Islamic Bank gained 1.64 percent.
Saudi Arabia’s Tadawul had fallen 1.49 percent Wednesday from the previous day’s close to end 6,160.52 points.
Thursday’s rebound after four days of mayhem in the Gulf bourses is expected to bring back investor confidence.
All markets in the region went on a freefall after the Eid-ul-Fitr holidays, which ended Saturday, as the global financial crisis made traders jittery despite assurances of stability and commitments pf liquidity from the region’s economic authorities.
In the course of the last four days, all markets in the region touched yearlong lows.
Then, in a bid to address the situation, the Central Bank of Kuwait Wednesday morning cut interest rates by 125 basis points, bringing the benchmark discount rate down to 4.5 percent from 5.75 percent and the repo rate to 2.5 percent from 3.5 percent.
The UAE Central Bank followed suit late Wednesday, after the markets closed, cutting the lending rates to banks from 5 percent to 3 percent.
The bank also slashed its repo rate from 2 percent to 1 percent with effect from Wednesday.
On Thursday, the Bahrain Central Bank cut its key policy interest rates 25 basis points.