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Wednesday 8 October 2008
Panicked Arab Stock Markets Plunge, Israel gains
Stock markets plunged across the Arab world on Tuesday as panic over the global financial crisis gripped investors, wiping billions of dollars off share values. PDF
Stock markets plunged across the Arab world on Tuesday as panic over the global financial crisis gripped investors, wiping billions of dollars off share values.
In contrast, the Israeli bourse surged after the Bank of Israel cut its base rate.
The market in oil powerhouse Saudi Arabia sank by seven percent while the biggest percentage loss was reported in Egypt, where the key index plummeted by more than 16 percent to its lowest level in two years.
In all, the seven Arab stock markets in the energy-rich Gulf have shed about 150 billion dollars of their capitalisation in the past three days to around 800 billion dollars.
“It is a catastrophe. It is clear that we will remain volatile and unpredictable as long as global markets remain impacted by the financial turmoil,” Saudi economist Abdulwahab Abu-Dahesh told AFP.
The Tadawul All-Shares Index in Saudi Arabia -- home to the Arab world’s biggest market -- finished down seven percent to a four-year closing low of 6,253.72 points.
The index had tumbled 9.81 percent on Monday and lost 16.1 percent in the past two days. TASI is 43.35 percent off last year’s close.
“We are a part of this world and are impacted psychologically and practically by what is happening in global markets,” said Kuwaiti economist Ali al-Nimesh.
The slide in the Saudi market was also driven by the modest profits reported by several major banks, with two already announcing a drop for the first nine months of the year.
Several Saudi banks declared that they were not involved in any way in the global sub-prime mortgage crisis and not expected to be affected.
But that apparently failed to lift investor sentiment from rock bottom.
Other bourses in the region were also down sharply.
Egypt’s CASE-30 index dropped by 16.47 percent from 7,059 to close on 5,896 points after the first day of trading since September 29 following a string of public holidays.
“There’s panic, everything is down, it’s incredible,” Ahmed Hefnawi, an analyst with major investment bank EFG Hermes, told AFP. “All sectors have been hit, with losses of 65 percent on some stocks.”
Trading was halted in more than 30 stocks after they fell the maximum they are allowed to drop, Egypt’s official MENA news agency reported. It did not say what stocks were affected.
The CASE-30 is now at its lowest point since September 2006, after almost doubling in value over the past four years to reach a high of 12,000 points in May.
The index in Dubai dropped 5.14 percent to 3,369.15 points, its lowest level in more than two years.
Shares in real estate giant and market leader Emaar shed 2.14 percent to under six dirhams (1.63 dollars), less than half book value, analysts said.
The drop came despite attempts by government-controlled real estate firms in Dubai to maintain investor confidence by announcing new multi-billion-dollar projects that have become a hallmark of the booming city state.
The Abu Dhabi Securities Exchange, the other bourse in the United Arab Emirates, closed down 4.6 percent at 3,395.31 points, mainly because of a sharp drop in real estate.
The Kuwait Stock Exchange, the second-largest Arab bourse, slumped 2.6 percent to a 16-month low of 11,635.90, apparently after the government rejected calls by lawmakers to intervene in the market.
It has dropped 9.4 percent in the past three days despite the central bank injecting tens of millions of dollars into local banks to boost liquidity. MPs have strongly criticised the government for failing to act.
The smaller Muscat Securities Market shed 7.3 percent while the Doha Securities Market was down just 1.55 percent.
Analysts said Gulf states must help restore investor confidence by pumping funds into the banking and financial system.
In Israel, stocks surged after the Bank of Israel announced a 0.5-point cut in its base rate to 3.75 percent.
The TA-25 index closed 3.91 percent higher at 797.92 points. The Tel-Tech index, which is tied to the booming high-tech sector, rose 6.78 percent to 169.98.
But the Al-Quds index on the Palestine Securities Exchange closed down 3.69 percent at 566.37 points.
1 comment:
Panicked Arab Stock Markets Plunge, Israel gains
By Omar Hasan
7 October 2008
Stock markets plunged across the Arab world on Tuesday as panic over the global financial crisis gripped investors, wiping billions of dollars off share values.
In contrast, the Israeli bourse surged after the Bank of Israel cut its base rate.
The market in oil powerhouse Saudi Arabia sank by seven percent while the biggest percentage loss was reported in Egypt, where the key index plummeted by more than 16 percent to its lowest level in two years.
In all, the seven Arab stock markets in the energy-rich Gulf have shed about 150 billion dollars of their capitalisation in the past three days to around 800 billion dollars.
“It is a catastrophe. It is clear that we will remain volatile and unpredictable as long as global markets remain impacted by the financial turmoil,” Saudi economist Abdulwahab Abu-Dahesh told AFP.
The Tadawul All-Shares Index in Saudi Arabia -- home to the Arab world’s biggest market -- finished down seven percent to a four-year closing low of 6,253.72 points.
The index had tumbled 9.81 percent on Monday and lost 16.1 percent in the past two days. TASI is 43.35 percent off last year’s close.
“We are a part of this world and are impacted psychologically and practically by what is happening in global markets,” said Kuwaiti economist Ali al-Nimesh.
The slide in the Saudi market was also driven by the modest profits reported by several major banks, with two already announcing a drop for the first nine months of the year.
Several Saudi banks declared that they were not involved in any way in the global sub-prime mortgage crisis and not expected to be affected.
But that apparently failed to lift investor sentiment from rock bottom.
Other bourses in the region were also down sharply.
Egypt’s CASE-30 index dropped by 16.47 percent from 7,059 to close on 5,896 points after the first day of trading since September 29 following a string of public holidays.
“There’s panic, everything is down, it’s incredible,” Ahmed Hefnawi, an analyst with major investment bank EFG Hermes, told AFP. “All sectors have been hit, with losses of 65 percent on some stocks.”
Trading was halted in more than 30 stocks after they fell the maximum they are allowed to drop, Egypt’s official MENA news agency reported. It did not say what stocks were affected.
The CASE-30 is now at its lowest point since September 2006, after almost doubling in value over the past four years to reach a high of 12,000 points in May.
The index in Dubai dropped 5.14 percent to 3,369.15 points, its lowest level in more than two years.
Shares in real estate giant and market leader Emaar shed 2.14 percent to under six dirhams (1.63 dollars), less than half book value, analysts said.
The drop came despite attempts by government-controlled real estate firms in Dubai to maintain investor confidence by announcing new multi-billion-dollar projects that have become a hallmark of the booming city state.
The Abu Dhabi Securities Exchange, the other bourse in the United Arab Emirates, closed down 4.6 percent at 3,395.31 points, mainly because of a sharp drop in real estate.
The Kuwait Stock Exchange, the second-largest Arab bourse, slumped 2.6 percent to a 16-month low of 11,635.90, apparently after the government rejected calls by lawmakers to intervene in the market.
It has dropped 9.4 percent in the past three days despite the central bank injecting tens of millions of dollars into local banks to boost liquidity. MPs have strongly criticised the government for failing to act.
The smaller Muscat Securities Market shed 7.3 percent while the Doha Securities Market was down just 1.55 percent.
Analysts said Gulf states must help restore investor confidence by pumping funds into the banking and financial system.
In Israel, stocks surged after the Bank of Israel announced a 0.5-point cut in its base rate to 3.75 percent.
The TA-25 index closed 3.91 percent higher at 797.92 points. The Tel-Tech index, which is tied to the booming high-tech sector, rose 6.78 percent to 169.98.
But the Al-Quds index on the Palestine Securities Exchange closed down 3.69 percent at 566.37 points.
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