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Tue 23 Sep 2008 05:05 PM

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Gulf bourses extend decline

Investors sceptical about US move to rescue collapsing financial system weigh on markets in Gulf.

Most Gulf bourses extended their decline on Tuesday in line with global markets as investors remained sceptical about a US move to rescue the collapsing financial system. Qatar bucked the trend and inched up.

A global selloff in equities has triggered similar moves in the Gulf Arab region despite attempts by market authorities to reassure investors on the transitory nature of the current slide in their domestic bourses.

"Yesterday, the fall in US stocks caused Gulf Arab markets to decline as investors are now seeing the markets here as being related to what's happening globally," said Amro Motasim, chief trader at Ahli Bank.

Real estate stocks led the decline in Abu Dhabi and Dubai after the outlook for the global economy spread panic among Gulf Arab investors. Washington has devised a $700 billion bailout plan in an attempt to rescue crisis-hit markets.

"All reports about the property market in the UAE are very optimistic, so the selling pressure we are seeing today is not due to concerns about the sector but because of worries about the global financial system," said Alfred Fayek, director in the Gulf Arab institutional sales team at EFG-Hermes.

"The US move didn't solve the problem; it is only a temporary cure."

Banking stocks dragged Oman to end down but the general director-general of the Muscat Securities Market predicted a rebound in the market, supported by high oil prices.

"There's no reason why the MSM index should not go up soon, the fundamentals are still strong fuelled by high oil prices," Ahmed Al-Marhoon told newswire Reuters.

Emirates Telecommunications Corp. (Etisalat) ended 2.02 percent lower after it said it agreed to acquire 45 percent of India's Swan Telecom for up to $900 million.

Dubai's main index ended 3.56 percent lower at 4,051 points and Abu Dhabi's measure closed 2.84 percent lower at 3,900 points.

Dubai's Emaar Properties lost 3.97 percent and in Abu Dhabi, Sorouh Real Estate and Aldar Properties slipped 7.45 percent and 5.48 percent respectively.

Kuwait's main index ended 2.04 percent lower at 12,871 points. Kuwait Finance House and National Bank of Kuwait (NBK) fell 4.1 percent and 2.22 percent respectively.

In Oman the main index ended 1.21 percent lower at 8,618 points. Bank Muscat and Ahli Bank lost 3.01percent and 2.97 percent respectively.

Qatar's benchmark edged 0.08 percent higher to 9,439 points, led by Commercial Bank of Qatar thatrose 3.91 percent.

In Bahrain the benchmark closed down 1.48 percent at 2,496 points. Ahli United Bank and Gulf Finance House dropped 1.9 percent and 7.74 percent respectively.

The Saudi market was closed for a holiday.

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