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KUWAIT CITY: Arab shares tumbled for the fourth day running on Wednesday but the Saudi bourse, the region's largest, rebounded after an international rate cut while the Egyptian market made up some ground.
Concerns mounted about the impact of the global financial crisis on the oil-rich Gulf, where the region's seven stock markets lost more than 30 billion dollars of capitalisation in the latest rout.
That brought their value down to 770 billion dollars, a loss this week of around 180 billion dollars.
"High tension and panic are gripping the Gulf stock markets," Kuwaiti economist Hajjaj Bukhdur told AFP.
"Some major portfolios and investment funds are pressurising governments to intervene by injecting liquidity," he said.
Most regional markets closed before the announcement by the world's major central banks of coordinated interest rate cuts.
But stocks in Saudi Arabia, which was still trading when the cut was announced, rebounded strongly as investors looked for a similar cut by the Saudi Arabian Monetary Agency (SAMA), the kingdom's central bank.
After slumping below 6,000 points for the first time in more than 52 months and shedding more than eight per cent, the Tadawul All-Shares Index closed down just 1.5 per cent at 6,160.52 points.
The TASI plummeted 17.4 per cent since resuming trading on Monday following a religious holiday. Wednesday is the last trading day of the week in the Muslim kingdom.
The earlier slide came despite assurances by SAMA deputy governor Mohammad al-Jasser that Riyadh faces no liquidity problems and is not exposed to the global financial crisis.
"It's an infection that we are suffering from though our exposure to global markets is not high," Saudi economist Ihsan Bu Hulaiga said.
"Prices of many stocks are really very, very lucrative now," Bu Hulaiga told AFP.
Egypt's stock market also clawed back more than half of its losses to close 7.1 per cent lower.
The CASE-30 index, which had registered an intra-session decline of 13.4 per cent, ended the day at 5,479 points. The index had lost 16.47 per cent on
Tuesday.
An economist with major investment bank EFG Hermes saw little cause for optimism.
"It's a bit of an upward correction," but the stock market "is going to be very, very volatile for the rest of the year," Simon Kitchen told AFP.
The CASE-30 has lost more than half its value in six months after almost doubling its level over the past four years to a high of 12,000 points in May.
In the booming Gulf emirate of Dubai, shares have lost a quarter of their worth since the trading week began on Sunday.
The Dubai Financial Market sank another 8.43 per cent to 3,085.02 points at close. Giant real estate developer Emaar shed 7.4 per cent while leading construction firm Arabtec dipped the maximum 15 per cent.
"I think the crisis in Dubai will be much bigger because of signs of weakness in the real estate market and as Dubai is more exposed to global markets," Bukhdur said.
The Kuwait Stock Exchange, the second largest in the Arab world, closed down 1.4 per cent at 11,472.00, recovering from bigger losses after the central bank cut the benchmark lending rate by 1.25 percentage points to 4.5 per cent.
The Doha Securities Market Index finished down 8.77 per cent at 7,432.87 points, the biggest single-day decline in gas-rich Qatar's financial market in several years. It shed 20 per cent this week.
The Abu Dhabi Securities Exchange, the other bourse in the United Arab Emirates, shed 6.43 per cent to close on 3,176.94 points. The Muscat Securities Market slumped 7.2 per cent at close and was below the 7,000-point mark for the first time in more than two years.
The slump "is due to a wave of panic among traders, particularly small investors, due to what they see happening in world markets, although Omani officials have been reassuring about the financial situation in the country," said an official at the Muscat Securities Market.
The executive president of Oman's central bank, Hmoud bin Sanjur al-Zadjali, told AFP the bank is "ready to intervene any time there is a need to pump cash into the banking system," though local banks now have enough liquidity.
The Beirut Stock Exchange appeared to be less severely affected, with the index closing just 1.12 per cent lower.
- AFP/ir
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