Gulf stocks plunge as G20 fails to halt panic
KUWAIT CITY (AFP) — Stock markets in the Gulf states plunged on the week's opener Sunday as panic from the fallout of the global economic crisis continued to dampen investor sentiment.
The slump came despite the approval by leaders of the G20 nations of an action plan on Saturday to restore global growth and prevent future financial upheaval while promising new spending plans and a set of reforms.
Markets of Dubai, Muscat and Doha were the biggest losers, while the Saudi market, the largest Arab bourse, fluctuated sharply at the opening after diving 7.4 percent on Saturday to its lowest level since March 2004.
In the United Arab Emirates, the two bourses of Dubai and Abu Dhabi continued to reel under the woes of the flagging real estate sector amid reports of a sharp drop in the prices of units.
Turnover was sharply down from this year's average, an indication that many investors are staying away amid a huge sell-off that included blue chip stocks.
Traders said the sell-off came mainly from investors who were forced to liquidate stocks in order to raise cash to meet debt commitments.
The Dubai Financial Market closed down 5.9 percent 1,981.44 points, the first time in more than four years it has dropped below the 2000-point barrier.
Market leader, property giant Emaar shed 9.75 percent, just off the maximum allowed 10 percent to close at 2.87 dirhams (0.78 dollars).
Emaar, which is trading at a four-year low, has so far plunged more than 80 percent this year. DFM dropped for the seventh straight session and has dived more than 29 percent since the start of last week. It is down 66.6 percent on the year.
The Abu Dhabi Securities Market recovered most of its losses to finish down 0.34 percent at 2,755.62 points, spurred by the key real estate sector which gained 0.4 percent.
The energy sector was up 5.1 percent and banks one percent. All other sectors dropped.
The Saudi bourse reversed opening gains and was trading down 2.4 percent by mid-day, diving below the 5,000-point mark for the first time in almost 55 months.
The leading petrochemicals sector was 2.6 percent lower and banks dropped 4.1 percent.
The Tadawul All-Shares Index (TASI) slumped 7.4 percent on the week's opener Saturday as market leaders petrochemicals SABIC and Al-Rajhi and SAMBA banks dropped by the maximum allowed level.
The Doha Securities Market slumped 5.1 percent to just above 5,500 points, a two-year low.
The small Muscat Securities Market retreated 6.1 percent to below the 6,000-point mark while the Bahrain Stock Exchange lost 0.35 percent.
Kuwait Stock Exchange, the second largest in the region, remained closed on Sunday after a court ordered trading halted on Thursday to stem heavy losses by small investors.
Commerce and Industry Minister Ahmad Baqer, who is the head of KSE Committee, said the bourse has filed an appeal against the suspension. The court held its deliberations and the ruling is expected any time.
Even if the court lifts the suspension, trading will not resume on Sunday as the bourse trading hourse are over for the day.