Dubai bourse leads Gulf stocks slide

Stock markets in the oil-rich Gulf states continued to bleed on Tuesday, led by the Dubai bourse, as investors remained jittery over the pessimistic global economic outlook. Investors are becoming increasingly concerned over the future of Gulf economies as the price of oil, the main source of income, has dropped sharply coupled with reports of heavy losses by Gulf investments abroad. That is bound to force governments to cut public spending, the main driver of economic activities in the six-nation Gulf Co-operation Council (GCC), which pumps just under a fifth of the world’s crude supplies. The Dubai Financial Market (DFM) dived nearly 7.3 per cent to 2,343.15 points at close, a four-year low, after shedding more than nine per cent in the previous two days. The DFM Index was again dragged down by the market leader, property giant Emaar, which dipped a massive 9.9 per cent to a new record low of Dh3.74. Emaar, the largest publicly traded real estate firm in the Middle East with projects worth $100 billion (Dh367bn) underway, has so far dropped more than 75 per cent this year. The firm, in which the government of Dubai holds a 30-per cent stake, has lost 30 per cent in the past two weeks alone and more than 60 per cent in the past three months. Its price is way under its book value. The real estate sector, the largest in the DFM, shed 9.8 per cent and telecoms lost 9.9 per cent. However, in an upbeat assessment, Emaar chairman Mohammed Alabbar told a World Economic Forum meeting in Dubai on Monday that « domestic demand for real estate continues to outstrip supply, and it will be so for several years ». Also in the UAE, the Abu Dhabi Securities Exchange slumped 4.9 per cent to 2,975.28 points, below the key 3,000-point mark, with the leading real estate sector shedding 8.8 per cent. Banks were down four per cent and energy sank 7.6 per cent. The Saudi market, the largest in the Arab world, was trading down almost five per cent to below 5,500 points at mid-day. The Tadawul All-Shares Index (TASI) was dragged down by the leading petrochemicals sector, which shed 6.2 per cent, and banks, which dropped 5.2 per cent. The market leader, petrochemicals giant SABIC, was down 5.7 per cent after its chairman Mohammed Al Madi said on Monday that prices of its products lost 50 per cent in the past six weeks, affecting the fourth quarter results. SABIC has lost about 35 per cent in the past two weeks. Kuwait Stock Exchange, the second biggest Arab bourse, finished down 2.16 per cent at 9,056.10 points for the first time since August 2005. The leading banking sector was down three per cent and investment firms sank 3.5 per cent. The KSE Index has slumped more than 42 per cent since June 24 when it reached its peak of 15,654 points. The market failed to respond to statements by the Kuwait central bank, which said a crisis at the Gulf Bank, troubled by large losses in derivatives deals, was totally under control. Doha Securities Market closed down 6.25 per cent at 6,342.48 points, its lowest level in more than 20 months. It has lost 14.3 per cent in the past three days. The smaller Muscat Securities Market, the only Gulf bourse to close on Monday slightly up, ended down two per cent while the Bahrain Stock Exchange dropped 2.74 per cent. AFP