Gulf markets continue gains, but Kuwait bucks trend again (Roundup)October 14th, 2008 - 8:25 pm ICT by IANS
Dubai, Oct 14 (IANS) Gulf bourses, except in Kuwait, continued their upward trend for the second consecutive day Tuesday buoyed by remedial measures announced by monetary authorities to boost the region’s banking sector.The key Dubai Financial Market (DFM) led the region’s resurgence again, posting its biggest one-day gain for the second consecutive day. The DFM index soared 10.76 percent from Monday’s close to end at 3,703.34.
Among the major gainers were real estate companies Emaar, which rose 14.92 percent, and Deyaar, up 14.96 percent. Arabtec and Union Properties posted gains of 14.93 percent and 14.61 percent respectively.
Another major bourse in the United Arab Emirates (UAE), the Abu Dhabi Securities Exchange (ADX), also rose 7.53 percent from the previous day’s close to end at 3,602.45.
The ADX’s real estate index led the gains rising 9.69 percent.
Major gainers included Aldar Properties (up 9.85 percent) and Sorouh Properties (up 9.75 percent). The Abu Dhabi Commercial Bank (ADCB) posted a gain of 10 percent.
Investor confidence seemed to be restored in the UAE markets following news Tuesday morning that a further 70 billion dirhams ($19 billion) was being injected into the country’s banking sector.
Vice-President and Prime Minister of the UAE and Ruler of Dubai Sheikh Mohammed Bin Rashid Al Maktoum ordered the transfer of the amount to the country’s ministry of finance so that it could inject the required liquidity into the national banking sector.
That brought the total amount injected to the banking sector over the last month to 120 billion dirhams ($32.7 billion).
The UAE Central Bank allocated 50 billion dirhams ($13.6 billion) Sep 22 as facilities for the banks operating in the country so that they could use them if required to avoid the current global financial crisis.
The Saudi market, which opens later than other regional bourses, also continued its upward surge for the second consecutive day Tuesday.
The powerful Tadawul All-Share Index was up by over eight percent at 3:30 p.m. local time.
Real estate, construction and banking and financial indices were the main gainers during the day’s trading.
Kuwait was the only exception, bucking the regional trend for the second consecutive day and falling 31 points from Monday’s close to end at 11,795.7.
The services sector retreated by 236.1 points while the banking sector fell 146.2 points.
Three major Kuwaiti banks - Kuwait Finance House (KFH), National Bank of Kuwait (NBK) and Commercial Bank of Kuwait (CBK) - had released quarterly results Monday with assertions of stability within their systems.
While NBK shares fell 60 points in Tuesday’s trading, CBK lost 20. Sharia-compliant KFH, however, gained 40 points.
Meanwhile, another major gainer of the day was Qatar’s Doha Securities Market (DSM), which soared 9.88 percent or 753.27 points from Monday’s close to end at 8,377.36 points.
It was DSM’s biggest one-day gain in eight years.
Reflecting a restoration of investor confidence, banking shares led the gains.
Qatar’s sovereign wealth fund Qatar Investment Authority (QIA) has announced that it would buy up to 20 percent of the shares of the country’s banks to ensure their stable foundations.
Oman’s Muscat Securities Market (MSM) too gained 8.37 percent from Monday’s close to end at 7,717.43.
Major gainers on the MSM floor were Shell Oman (up 9.98 percent) and Oman Holding International (up 10 percent).
The Bahrain Stock Exchange also rose 1.77 percent from Monday’s close to end at 2,371.02.
Opening Oct 5 after the Eid-ul-Fitr holidays, Gulf markets went into a free-fall in the face of the global credit crunch.
Monetary authorities had to resort to a series of remedial measures to shore up the banking sector.
Central banks of the UAE, Kuwait, Bahrain and Saudi Arabia announced interest rate cuts along with assurances of liquidity over the weekend.
After Monday’s resurgence, investors and the regional media reacted with joy but maintained cautious optimism.
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