Arab bourses plunge on US recession fears

March 21st, 2008 - 7:54 pm ICT by admin  

Amman, March 21 (DPA) Arab stock markets lost ground this week in response to plunges on world markets and concern about a US economic slowdown, but financial analysts said Friday they expected regional stocks to benefit from the US Fed’s latest interest rate cut. “Middle East markets have come again under psychological impact from international bourses which plunged this week in response to US recession fears,” Nizar Taher, head of brokerage at the Jordan Ahli Bank, told DPA.

“Therefore, I think Arab stock markets will rebound, drawing benefit from the Fed’s cut of the dollar interest rates by 0.75 percentage point,” he said.

Most of Arab Gulf states, which peg their currencies to the greenback, have cut their respective interest rates to match those of the dollar.

Taher pointed out that the recurrent crises in the United States and major world markets should prompt hundreds of billions of Arab surplus petrodollars invested abroad to return home.

Saudi stocks extended losses for the fourth week in a row this week, with investors coming under mounting pressures from world markets and reports of imminent US stagnation.

The Tadawul All Share Index (TASI) of the Arab world’s largest bourse shed 4.1 percent this week, closing at 9,488.85 points from 9,984.58 points last week.

TASI is currently 15.1 percent lower than the year’s start, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG).

“The Saudi stock market is still on positive outlook, given the attractive prices of many listed firms, particularly petrochemical and banking stocks,” the BIG said.

The all-share price index of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi shed 2.0 percent this week, closing at 5,886 points from 6,008 points last week.

Egypt’s CASE 30 index, measuring the performance of the market’s 30 most active shares, declined 3.8 percent this week, closing at 10,905 points.

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