Gulf bourses tumble on global concerns

Dubai property developer Emaar takes another severe beating, regional bank stocks also suffer.
Gulf bourses tumble on global concerns
HEADING SOUTH: All the GCC markets fell, except Saudi Arabia which was closed. (Getty Images)
By Ola Galal
Sun 05 Oct 2008 11:22 PM

Gulf Arab bourses fell on Sunday as investors rushed to sell stocks after a $700 billion US rescue plan failed to ease qualms over global financial turmoil.Many foreign investors also fled stock markets in the world's top oil exporting region as global worries over the health of the world economy escalated.

"Retail investors are panicking because of what is happening in global markets. The rescue plan failed to comfort investors as they believe it will take a couple of months for its effects to be felt," said Adel Nasr, broker at United Securities brokerage.

Real estate stocks led the drop in the United Arab Emirates, with Emaar Properties posting its sharpest one-day decline in at least two years and Aldar Properties and Sorouh Real Estate both falling more than 9 percent.

News of a proposed merger between Dubai-based Islamic mortgage lenders Tamweel and Amlak Finance pushed the shares of the rival firms lower as investors awaited more clarity on the move. "One view is the merger [talks] between Tamweel and Amlak is negative becuase it is not clear why they are doing it now, especially when we have mortgage problems globally and there is a liquidity problem in the UAE and banking sector," said Sherif Abdelkhalek, institutions accounts manager at Beltone Financial.

Banks led Kuwait's and Qatar's benchmark to their biggest single-day drop in three weeks.

"The $700 billion move has resolved the issue only for the short term and for the US. It has done nothing for the rest of the world," said Mohamed Yasin, managing director of Shuaa Securities.

"The problem we're facing today is not an equity problem but a liquidity problem across the banking system around the world and the Gulf Arab region is part of that... the money pumped into the system is not enough."

Saudi Arabia's market was closed for a holiday. 

Dubai's benchmark slid 6.86 percent to 3,844 points. Shares of Emaar Properties plunged 12.26 percent, its biggest single-day fall in at least two years, and Arabtec Holding tumbled 14.4 percent.

Emaar and Saudi Arabia's Al-Shoala Group said on Saturday they were setting up a joint venture to develop a 27 billion riyal ($7.2 billion) luxury township near the Saudi capital Riyadh.

Abu Dhabi's benchmark declined 4.72 percent to 3,769 points with Aldar and Sorouh falling 9.16 percent and 9.26 percent respectively.

Kuwait's benchmark fell 3.59 percent to 12,379 points with National Bank of Kuwait and Kuwait Finance House falling 4.44 percent and 3.77 percent respectively.

Qatar's benchmark lost 6.98 percent to 8,664 points. Industries Qatar plunged 8.23 percent and Qatar National Bank 9.01 percent.

Oman's benchmark closed 2.79 percent lower at 8,256 points. National Bank of Oman plunged 4.9 percent.

Bahrain's index edged down 0.35 percent to 2,454 points. Gulf Finance House declined 3.35 percent. (Reuters)

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