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Thu 17 Feb 2011 10:56 AM

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Bahrain protests weigh on Gulf stocks

Political unrest takes toll on Bahrain, Qatar bourses as regional benchmarks tumble

Bahrain protests weigh on Gulf stocks
Ongoing protests in Bahrain are seen weighing on Middle East equities, with nervous investors reluctant to buy stocks

Ongoing protests in Bahrain are seen weighing on

Middle East equities, with nervous investors reluctant to buy

stocks.

The Qatar and Bahrain bourses are open on

Thursday, but other Gulf Arab markets are closed for the weekend

or a religious holiday.

Regional benchmarks fell a day earlier and further weakness

is expected.

"Revolution in Egypt was shrugged off too easily by Gulf

markets," says Hashem Montasser, managing partner at Frontlane

Capital, a Dubai-based asset management firm.

"Markets were mispriced in the sense that risk premiums have

gone up, but equities prices didn't reflect that. Bahrain has

become the catalyst to now re-price Gulf equities."

The leader of Bahrain's main Shi'ite opposition bloc said

the storming of a central Manama square where protesters had

camped out overnight was "real terrorism", while more than 50

armoured vehicles were seen travelling towards Pearl Square in

central Manama on Thursday.

"Bahrain has heightened risk for at least the next couple of

months," adds Montasser.

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