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Wed 21 Jan 2009 10:20 AM

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Most Gulf bourses end lower; Emaar plunges over 9%

UPDATE 7: Property giant’s stock dips after HSBC cut developer's price target.

Most Gulf Arab bourses fell sharply on Wednesday, hitting fresh multi-year lows as a flurry of disappointing results in the oil-exporting region and a slump in global markets further dented investor confidence.

The benchmark US S&P 500 and Nasdaq markets both fell more than 5 percent on Tuesday and worrisome economic data sent Asian shares to their lowest levels in more than six weeks.

Qatar's bourse QSI led declines in the Gulf Arab region, tumbling 8.3 percent, with Commercial Bank of Qatar plunging 7.2 percent after fourth-quarter profit fell around two thirds.

"It's not committed to our region. The US collapsed yesterday. Risk aversion is growing once again in the world and puts negativity on all emerging markets," Rami Sidani, head of investment for the Middle East and North Africa at Schroders in Dubai, said.

The surprise 95.5 percent plunge in fourth-quarter earnings at petrochemicals giant Saudi Basic Industries Corp (Sabic), announced Tuesday, continued to rattle investors across the region.

"What's happened in Saudi Arabia with SABIC and Saudi Telecom will mean negative sentiment will be sustained," Adel Nasr at Muscat-based United Securities said.

On Tuesday, Saudi Telecom, the Arab world's largest telecom company by market value, posted fourth-quarter earnings down 62 percent, well below analysts' forecasts.

Bourses in both Dubai DFMGI and Abu Dhabi ADI lost more than five percent with Emaar Properties, the Arab world's largest real estate developer by market value, dropping nearly 10 percent after HSBC cut its price target to 8.50 dirhams from 13.90 dirhams.

Dubai's real estate sector continued to suffer as property prices fall, developers scale back and put on hold projects and jobs go.

The UAE's central bank governor said on Wednesday the oil producer was not headed for a recession now and expected to achieve low economic growth this year.

Dubai and Abu Dhabi stock markets have fallen around ten percent since the start of the year in the run-up to the release of financial results.

"We are just waiting for the results now. Uncertainty is worse than reality," said Matthew Wakeman, a director of trading at EFG-Hermes in Dubai.

Oman's index MSI lost 6.3 percent, falling for a seventh trading day, while Bahrain's benchmark BAX fell 1.7 percent.

Saudi Arabia's benchmark TASI was the only one to close higher, led by Etihad Etisalat which rallied 5.8 percent, after the kingdom's second-largest telecom operator posted a 51 percent rise in fourth-quarter earnings. the index inched up 0.3 percent.